Port and Free Zone World, a subsidiary of Dubai World, has decided to buy publicly listed shares of DP World.

Reportedly, Citi and Deutsche Bank underwrote $9 billion in loans for Port and Free Zone World to acquire shares in DP World. Soon, the two banks began signing up partners to distribute the debt finance.

The other banks involved in the DP World and Dubai World debt finance deal includes Bank of Nova Scotia, Credit Agricole, Emirates NBD, First Abu Dhabi Bank, HSBC, JPMorgan, Samba Financial Group and Standard Chartered.

According to media reports, DP World will borrow $5.15 billion to fund a dividend to Dubai World, which is the sole shareholder of Port and Free Zone World. The loans, then will be sold to a wider group of banks in the coming weeks.

The de-listing of DP World from Nasdaq Dubai has forced credit rating agency Moody’s to put the firm under review for a potential downgrade.

In a statement, Moody’s said, “The sizable dividend payment to Dubai World breaks our current assumption that DP World’s credit profile is unaffected by the debt burden at the level of Dubai World.”

However, DP World believes the de-listing will help the company fulfill its ambition of becoming the world’s leading end-to-end logistics provider.

In the last one year, DP World has invested significantly in logistics assets all over the world to fulfill its ambition. Earlier this year, the port operator acquired a 44 percent stake in container terminal operator Swissterminal Holding.

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DP World’s UAE operations contribute more than 33.4 percent of Dubai’s GDP, media reports said. This initiative will enhance the business climate by supporting more than 7,500 businesses in Jafza. 

Trade is pivotal to Dubai’s economic development. DP world has played an important role in supporting trade in the country. Mohammed Al Muallem, chief executive and managing director of DP World, UAE region and chief executive of Jafza, told the media, “It’s a timely move to inspire our customers towards pursuing their business targets with greater confidence and purpose. It’s specifically designed to create value and opportunities for the companies to channel their resources to support their activities sustainably,” 

It is reported that Jafza represents nearly 23.9 percent of total foreign direct investment flow into Dubai, creating job opportunities for more than 135,000 people. Jafza generated trade worth $93 billion in 2018. 

Jafza is one of the top free trade zones in the world and houses more than 7,500 multinational companies. Jebel Ali Port and Free Zone established a multi-modal hub with sea, air and land connectivity. 

Last year, free zones were a major factor to driving foreign trade in Dubai. The UAE’s non-oil foreign trade increased by 6 percent to Dh1.37 trillion in 2019 as a result of higher economic activity across the emirate’s free zones.

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The supply chain includes ports, rail networks, and container terminal. The investment from DP World could help Bangladesh accumulate cumulative economic benefits worth $35 billion. While around $14 billion will come from the logistics corridor, the other $21 billion will come from the digital platform.

Reportedly, DP World has already approached the government in Bangladesh with its proposal.

According to the proposal tabled by DP World for the government in Bangladesh, DP World wants to invest in Patenga container terminal. It also wants to operate the Kamalapur inland container depot and modernise and operate the New Mooring Container Terminal (NMCT) and Chittagong Container Terminal (CCT).

In a concept paper, DP World said, “Our vision is to enable Bangladesh to be a connecting landmass to a market of three billion people. DP World is ready to transfer and then co-create a technology platform that will bring efficiencies by bringing all logistics stakeholders into one platform which will get rid of complex and expensive interactions.”

According to media reports, DP World is also considering buying a 49 percent stake in Fesco Transport Group, the largest intermodal transport operator in Russia.

In 2017, DP World bought in a minority stake in Fesco Transport Group as a part of its programme to diversify its operations and secure its place as a global trade enabler.

Last year, the media also reported that DP World is considering placing a bid for Singapore-based Miclyn Express Offshore, a leading provider of service vessels to the expanding offshore oil and gas industry across Southeast Asia and the Middle East, just months after buying Topaz Energy and Marine for $1.08 billion.

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Once operational, the chemical facility developed by AquaChemie will serve as a strategic gateway that will facilitate smoother chemical trade within the UAE and across the GCC nations.

The facility will also boost the global petrochemical market which is valued at around $539.3 billion.

It will have bulk storage tanks for liquid hydrocarbons chemical processing units, automated drumming lines, warehousing and storage facilities, dedicated road tankers and large trailer truck fleet, pump house and main hose exchange station, separate road tanker entrance with weigh bridge, loading and unloading ramp for forklift operation, and an office block with control rooms.

According to media reports, AquaChemie has signed a deal with Mott MacDonalds-an employee-owned management, engineering, and development consultancy. According to the deal, the UK-based consultancy firm will be providing design, engineering and project management services for the strategic facility.

With regard to the project in the UAE, V Anandkumar, co-founder and director of AquaChemie Middle East, told the media, “The project will serve as a catalyst to boost petrochemical trade between manufacturers in the region and end-users anywhere in the globe. In addition to serving as a sales channel, the project will also allow regional petrochemical majors to market their various product lines in drums or intermediate bulk containers for distribution to the tertiary chemical industry.”

He also pointed out that the project will also serve as a regional hub for other global trading partners to ship economically, in bulk and distribute in smaller packaging.

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