DP World seeks loan to repay part of debt
Monday, 13 February 2012 | 11:00
DP World has started talks with banks for a loan to help pay half of a $3-billion (Dh11.01 billion) credit facility maturing in October, a banker familiar with the discussions has said.
The Dubai World-controlled company is talking to HSBC Holdings, Standard Chartered and Citigroup for a $1.5-billion loan, the banker said, asking not to be identified because the information is private. DP World will repay the remaining $1.5 billion with its own cash, he said.
It secured the five-year revolving credit facility in October 2007 at a margin of 45 basis points over the London interbank offered rate, according to data.
Raising the money "shouldn't be an issue as they have now been rated investment grade by two of the rating agencies", Abdul Kadir Hussain, chief executive officer at Dubai-based fund manager Mashreq Capital DIFC Ltd, said in a phone interview on Thursday. "They have come through a strong set of results, over the last year or so and they have pretty much ring-fenced themselves quite well from the Dubai World situation." DP World, which operates more than 60 terminals across six continents, is expanding operations in China, India and the Middle East as it seeks to boost capacity to 100 million twenty-foot equivalent container units (TEUs) by 2020, according to its website. The company said in December it will invest $850 million in the next three years to expand capacity at its flagship Jebel Ali port.
A spokeswoman for DP World couldn't be reached for a comment outside office hours. Officials at HSBC, Standard Chartered and Citigroup in Dubai declined to comment.
DP World handled 54.7 million TEUs at its ports last year compared with 49.6 million TEUs a year earlier, it said on January 31. It forecast full-year gross profit to be "in line with expectations" after reporting a better-than-expected 36 per cent rise in first-half profit to $281 million.
DP World has $10.8 billion of debt and interest payments outstanding, according to data compiled by Bloomberg. The company had $4.1 billion in cash at the end of June.
The yield on the port operator's 6.25 per cent Islamic bond due in July 2017 fell 3 basis points, or 0.03 percentage point, to 5.43 per cent on Thursday.
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