DP World float to set Mid East high

DP World, the Dubai-based ports operator that bought Britain's P&O, is on course to become the Middle East's largest stock market listing to date.

The company yesterday priced shares for its float between $1.00 and $1.30 a share – putting a value of between $16.5bn and $21.5bn (£7.9bn and £10.2bn) on the company.

Last year, DP World had revenues of $2.1bn which generated earnings before interest, tax, depreciation and amortisation of $705m. In the first half of this year, revenues reached $1.2bn with ebitda at $453.7m

A spokesman said it would not be making public a pre-tax profit number or setting out its depreciation or amortisation policy. The prospectus will only be made available to "qualified investors" in the UK.

Until now the biggest fund-raising for a Middle East float was Saudi Telecom's $4bn. DP World looks set to beat that, but may not hold the record for long. There is growing speculation that Dubai's ruling family plans a string of floats, with Emirates Airlines tipped as the next candidate. "More companies could follow. It's very possible," said DP World chief executive Mohammed Sharaf.

DP World has snubbed the London Stock Exchange in favour of a listing on the two-year-old Dubai International Financial Exchange (DIFX).

"We are a home-grown company and wanted to share our success with Dubai," said Mr Sharaf. "We said we were looking at options and the LSE was one of them."

Dubai has ambitions to become a major financial centre, and DP World's IPO will raise Dubai's status considerably and act as a template for future listings.

Mr Sharaf does not rule out DP World's shares being listed elsewhere, but said if the Dubai offering was a success there would be no need for that. And he has no doubt that it will succeed. "We are seeing a tremendous amount of interest from both institutional and retail investors," he said.

His team's roadshow for the float has taken in 150 institutions, even before a trip to America, in two weeks.

The company is the world's fourth largest ports operator, but hopes to double capacity in 10 years – a rate of growth that will probably see it propelled to the number one slot. It became one of the world's top port operators last year when it paid $6.9bn for P&O, a 29-port business to go with its existing 22 sites. However, the company was then forced to sell six P&O ports in America following fierce congressional opposition on security grounds.

DP World now manages 42 terminals, including the UK's Southampton and Tilbury, on five continents.


Source:Telegraph.co.uk