DP World is contemplating allowing international investors an opportunity to buy into the Jebel Ali Free Zone (Jafza), one of the world’s largest free zones, to minimise its debt. According to sources, the state-owned logistics firm is working with advisors to sell a stake in Jafza or some assets in the zone. These sources also claim that it is likely to attract investment from infrastructure funds and strategic suitors. No finalised decisions have been made on the structure of the deal. Founded in the mid-1980s, the zone has operations of more than 8,000 companies and attracts nearly a quarter of foreign direct investment into Dubai. As per Bloomberg, DP World is exploring opportunities to sell equity stakes in some assets to maintain its investment-grade rating and reduce leverage to about 4x its earnings by 2022. In 2014, the firm bought the operator of Jafza for $2.6bn. DP World recently went private in 2020 to alleviate debt and prevent a situation similar to its 2009 bailout. The potential equity stake stale of Jafza comes after Dubai, Abu Dhabi and Saudi Arabia are all looking to open overseas investment opportunities into state assets.
DP World’s 3.908% 2023s are down 0.12, currently trading at 105.637. Its 4.7% 2049s are down 0.3, currently trading at 109.914.
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