DP World, CDPQ to invest $5bn in UAE
CDPQ will take approx 22% stake in Jebel Ali Port, Jebel Ali Free Zone and National Industries Park
DP World and CDPQ, a global investment group, announced an investment of $5 billion in three DP World's flagship UAE assets.
CDPQ will invest $2.5 billion in the Jebel Ali Port, the Jebel Ali Free Zone and the National Industries Park through a new joint venture in which it will hold a stake of approximately 22 percent (through a sub-concession of up to 35 years) with the remainder of the transaction being financed by debt," according to an official statement from DP World.
"Other long-term investors will have the opportunity to acquire an additional stake of up to $3 billion. The transaction implies a total enterprise value of approximately $23 billion for the three assets."
The Jebel Ali Port, Free Zone and National Industries Park together form a world-class integrated ecosystem for the supply and logistics chains of over 8,700 companies from around the world, serving more than 3.5 billion people globally. The three assets generated pro-forma 2021 revenue of $1.9 billion, the statement said. The three assets will remain fully consolidated businesses within the DP World Group, and day-to-day operations, customers, service providers and employees will not be affected, it added.
"We are delighted to announce the broadening of our partnership with CDPQ," says Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World. The DP World and CDPQ co-investments have been very successful, thanks to our complementary expertise and long-term investment horizon. We believe this new partnership will enhance our assets and allow us to capture the significant growth potential of the wider region. The transaction also achieves our objective of reducing DP World's net leverage to below 4x Net Debt to EBITDA and this has been achieved despite the challenges of the pandemic and recent global economic conditions."
Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure, CDPQ, added: "This investment in Jebel Ali is another great illustration of the partnership between CDPQ and DP World, which now spans four continents and eighteen terminals. Today, we are pleased to deepen our long-standing relationship with a world-class logistics and supply chain operator by investing in this strategic trade infrastructure, one that will play a pivotal role in the evolution of the global economy. DP World is well positioned to provide innovative solutions to their customers worldwide, and we welcome this opportunity to invest in a best-in-class group of infrastructure that provides CDPQ with exposure to new fast-growing markets and trade routes in Africa and South Asia."
Tranche 1 ($5 billion) of the transaction is expected to close in the second or third quarter of 2022, and tranche 2 (up to $3 billion) is expected to close during the fourth quarter of 2022, the statement said.