Text size:

  • Small
  • Normal
  • Large
The Republic Plaza Building, one of properties owned and managed by Brookfield Asset Management, in Denver, Colorado. Matthew Staver / Bloomberg News via Getty Images
Bloomberg Contributor
The Republic Plaza Building, one of properties owned and managed by Brookfield Asset Management, in Denver, Colorado. Matthew Staver / Bloomberg News via Getty Images

Dubai World sells Gazeley in first step to lighten debt burden

Dubai World has sold one of its UK assets as part of its efforts to repay creditors.

Dubai World, the ports, hotels and industrial conglomerate, has taken a first step towards lightening its debt burden ahead of a US$4.5 billion repayment in 2015.

Economic Zones World (EZW), a subsidiary of the government-owned group, has sold a British logistics business, Gazeley, for an undisclosed sum.

The buyer is Brookfield Asset Management, a Canadian investor that has done business with Dubai before through a property partnership with Investment Corporation of Dubai.

A spokesman for Dubai World declined to comment on any aspect of the deal, but it is believed the sale had been some months in the making.

EZW is the 100 per cent-owned arm of Dubai World that runs Jebel Ali Free Zone (Jafza), the industrial area that includes the UAE's biggest port.

Last year Jafza refinanced $2bn worth of debt via the issuance of a 7-year sukuk for $650 million and $1.2bn of bank debt, as well as some repayments. It is believed the proceeds from the deal with Brookfield will go towards repayment of the bank borrowings over the 8-year life of the debt.

In the documentation that accompanied that refinancing, EZW pledged up to $300 million for Jafza from any sale proceeds of Gazeley.

Dubai World bought Gazeley, which develops logistics parks and warehouses around the world, for between $450m and $600m in 2008.

Rehan Akbar, a corporate finance analyst with the ratings agency Moody's Investor Services, which rates the Jafza sukuk, said there was little clarity on the transaction. "Compared to the entire debt stock, this is probably not a huge amount, but it shows they can realise asset values where appropriate."

Reuters quoted an unnamed banker with exposure to Dubai World debtas saying: "This particular asset was earmarked for sale and it's a positive indication that they have disposed of it.

"The big elephant in the room is still Dubai World and we would like to see more such deals coming out of them in the near future. There is a willingness to do it more than before and the general improvement in market conditions should help going forward."

Other assets owned by Dubai World are also for sale to help to meet total debt repayments of nearly $15bn by 2018. It is believed an offer has been made for the Fontainebleau Miami Beach Hotel in Florida.

Financiers believe Dubai World may also be considering the sale of some of the 80 per cent stake it still holds in the quoted ports company DP World.

Meanwhile, the Dubai Government's statistics centre said yesterday that growth in the emirate's GDP accelerated to 5.3 per cent year-on-year in the fourth quarter of last year.

A statement by the centre quoted its executive director, Arif Obaid Al Muhairi, as saying economic indicators suggested growth would rise further.

The centre did not give a growth rate for the third quarter, but in the first nine months of last year, GDP expanded 4.1 per cent from a year earlier.

GDP rose 4.4 per cent over the whole year, the centre said, after 4.3 per cent growth in 2011.

 

* with Reuters

fkane@thenational.ae

Back to the top

More articles


Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Above, the private pool of Ocean Heights' five-bedroom penthouse flat. Courtesy Christie’s International Real Estate

In pictures: Penthouse flat is height of Dubai luxury living

A five-bedroom penthouse in Ocean Heights in Dubai Marina is on sale for Dh25 million and comes with a private pool and an unparalleled view of Dubai.

 The cooling towers of the Temelin nuclear power plant near the Tyn nad Vltavou in Czech Republic. The country wants to continue expanding nuclear energy capacity despite cancelling a tender to build two new units. David W Cerny / Reuters

In pictures: Best business images for the week to April 17, 2014

Here are some of the best business images for the week to April 17, 2014.

 Three generations of the Hakimi family tend to their stall Crawford Market in Mumbai. Subhash Sharma for The National

In pictures: Shopper’s delight at Crawford Market in Mumbai

Crawford Market is an old British-style covered market dealing in just about every kind of fresh food and domestic animal imaginable. Later on renamed Mahatma Jotirao Phule, the market remains popular among locals and visitors by its old name, taken from Arthur Crawford who was the first municipal commissioner of the city.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National