Dubai-based multinational logistics company DP World is reportedly planning to offer global investors a chance to buy stakes in the Jebel Ali Free Zone, a prized asset that helped to transform the emirate into a hub of global trade, as the firm looks for ways to reduce its debt pile.
According to people familiar with the matter, the Dubai-based port operator is working with advisers to gauge interest in the industrial park. DP World is considering options like selling a stake in the free zone or some assets based there.
Any sale is likely to attract interest from infrastructure funds and strategic suitors, the people said, asking not to be identified discussing confidential information. Currently, no final decisions have been taken on the structure of a potential deal. Meanwhile, a representative for DP World declined to comment.
The Jebel Ali Free Zone attracts nearly a quarter of foreign direct investment into Dubai, with over 8,000 companies have set up operations in the trade zone since its inception in the mid-1980s. Dubai saw $6.7 billion of foreign direct investment in 2020, according to government figures.
The UAE state-owned DP World has been exploring the sale of equity stakes in certain assets as it works to reduce leverage to about 4 times of its earnings by 2022 and maintain its investment-grade rating. It agreed to buy the operator of the free zone in a $2.6 billion deal in 2014.
Dubai took DP World private in early 2020 to reduce its debt burden and avoid a repeat of the economic crisis that forced a bailout in 2009. In exploring the possible sale of a stake in Jebel Ali Free Zone, Dubai is also joining regional neighbors Abu Dhabi and Saudi Arabia for looking to open up to overseas investors by offering the chance to buy into state assets.
DP World is one of the world’s largest operators of marine ports and inland cargo terminals, stretching from gateways in London and Antwerp to hubs in Africa, Russia, India and the Americas.