Dubai World would consider selling some of its shareholding in DP World (DPW) if the planned listing of the ports group in London is successful, a DPW executive said yesterday.
The news came as Dubai World announced it had completed a major part of its US$24.9 billion (Dh91.45bn) restructuring after the formal signing of agreements with its financial creditors for $14.7bn of debt. The debt will be repaid in two tranches - $4.4bn over five years and $10.3bn over eight years.
Yuvraj Narayan, DPW's chief financial officer, confirmed the company's commitment to a London listing and said: "I would imagine if the valuation becomes more attractive and there is more liquidity, they [Dubai World] may well consider selling down some of their shares sometime in the future."
Dubai World holds 80 per cent of DPW's shares, which were floated in 2007 at $1.20 on the Nasdaq Dubai market.
They closed yesterday 0.3 per cent lower at 59.6 cents, after positive results for the 2010 financial year. There was no comment from the parent company.
A 35 per cent jump in net profits to $451 million signalled a "return of volume growth", said Mohammed Sharaf, DPW's chief executive, after a year of depressed global trade following the financial crisis.
The outlook for the current year was also positive, said Sultan bin Sulayem, the chairman of DPW.
"In the first two months of 2011 we have seen 12 per cent volume growth across our consolidated portfolio with further margin improvement from the previous year," Mr bin Sulayem said.
"It is particularly pleasing to see the UAE region continuing the strong performance seen at the end of last year. Despite continuing economic fragility and political turbulence in many parts of the world, given the spread of our portfolio, we remain confident that we will make further progress in 2011."
Mr Sharaf said the earthquake in Japan and political upheaval in some parts of the Middle East "would have no direct impact" on DPW's business. The company has no ports in Japan.
Analysts said the results were positive and the prospects for the London listing were good.
Nabil Ahmed of EFG-Hermes said: "We expect global trade growth of 6 per cent this year, so the fact they have done 12 per cent so far is a very good sign. Jebel Ali [the main UAE port run by DP World] tends to attract more business from other regional ports when there is instability."
The London listing is on track to take place before the end of the second quarter and is likely to comprise a listing of depository receipts, without raising any new money. The London Stock Exchange has to receive and approve yesterday's financial statements before it approves the listing, which will be voted on at DPW's annual meeting in May.
DPW had $2.5bn in cash at year end, and has since completed the sale of its Australian ports business for $1.5bn.
From earnings of 2.01 cents a share, DPW is paying a dividend of 0.86 cents a share, a 5 per cent increase.
Sheikh Ahmed bin Saeed Al Maktoum, the chairman of Dubai World since December, thanked the banks and creditors for their co-operation in the restructuring negotiations.
"The agreement signed today is a true reflection of the exemplary partnership between Dubai's corporations and local and international financial institutions," Sheikh Ahmed said. "Dubai World has now moved into a new phase of growth."
The balance of the total $25bn under restructuring relates to the property group Nakheel. The company said yesterday it had completed two important steps towards the completion of its restructuring of about $10bn of debts and liabilities to contractors and customers.
Nakheel said it would soon begin issuing agreements to trade creditors, including the terms of a sukuk to replace their debt, and it would also be issuing terms to the bank co-ordinating committee for their approval.
It said it expected the final restructuring to be completed by the end of June.