DP World raises US$2.3Bn investment war chest

DP World raised US$2.3Bn through bond listings in Dubai to invest in new port projects and reduce debt accrued through acquisitions. This UAE-headquartered ports and terminals group raised US$1.5Bn in Sukuk finance and US$800M in conventional bonds through listings on the Nasdaq Dubai exchange.

DP World plans to build new harbour terminals and expand others in reaction to rising global maritime trade and port infrastructure, resulting in opportunities for tug operators to expand their fleets through newbuilding investment in the next decade.

“Our debt issuances this year were well received by a wide variety of investors in the region and around the world,” said DP World group chairman and chief executive Sultan Ahmed Bin Sulayem, “enabling us to achieve competitive pricing structures as we continue to execute our strategy to become a logistics solutions provider to end-cargo owners.”

DP World’s growth strategy includes plans to expand terminals such as Le Havre in France and open new terminals in South America and Africa.

DP World has more than 150 operations in 50 countries across six continents and handled 70M TEU of containers in 2018. This rose to 91M TEU this year and is expected to climb further in 2020 through new terminal infrastructure.

In France, a joint venture between DP World and Terminal Link – PortSynergy Group has secured a concession to construct and operate new container ship berths at Port 2000 in Le Havre.

This terminal will increase container capacity by 1M TEU at a time when Boluda France is expanding its tug fleet with new Piriou-built vessels.

In Africa, DP World is investing US$520M in new port facilities in Sokhna, Egypt. It already operates Basin 1 in the port with operational capacity of 945,000 TEU. Investment in Basin 2 includes a 1.3-km quay for container ships. Its investment in Basin 3 creates a 400-m2 liquid bulk station for Egypt’s energy imports.

Tug operators in Egypt are increasing their tug fleets through newbuilding purchases in anticipation of growing trade in the strategically positioned nation. Egypt has become a hub for liquid, bulk and container trade as shipping uses its terminals in addition to transiting the Suez Canal.

Also in Africa, DP World is planning to create a logistics hub in Namibia. This involves developing the Nara Namib free economic industrial zone and logistics centre in Walvis Bay. DP World signed a memorandum of understanding to develop port infrastructure with a firm investment decision expected in Q2 2020.

It also has a presence in Senegal, Rwanda, Mozambique, Algeria and Somaliland in Africa.

In South America, DP World invested US$540M to open a 750,000-TEU container terminal in Posorja, Ecuador in October 2019. A second phase of investment will double capacity. Tug owners in Ecuador, such as OLEN, have enhanced their fleets by adding new vessels this year.

Investment in Asia and India is also driving growth in container ship handling and tug investment.

DP World said year-on-year growth in TEU handling was driven by investment in the ATI terminal in the Philippines and Qingdao in China, plus growth in the Cochin, Mundra and NSIGT terminals in India. However, it has discontinued operations in Tianjin, China and Surabaya, Indonesia.

DP World’s debt increased in Q3 2019 after it spent US$1.1Bn to acquire offshore support vessel group Topaz Energy and Marine from Renaissance Services and Standard Chartered.