Jan 27 2012 |
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DP World sells stake in UK container service firm
Friday, Jan 27, 2012
Gulf News
Dubai DP World has sold its 34 per cent stake in Tilbury Container Services Limited (operator of the Tilbury Container Terminal in the UK) to a UK-based company for $75.48 million (Dh277.20 million), the ports operator said yesterday in a statement.
In a statement on the Nasdaq Dubai bourse website, DP World said that it has sold all its shares in the container services firm to a subsidiary of Otter Ports Holdings, which owns Forth Ports.
“Following a similar transaction with Associated British Ports, the shareholder of Forth Ports now own 100 per cent of Tilbury Container Services,” the statement added.
Flemming Dalgaard, DP World’s senior vice-president and managing director for Europe and Russia, said in a statement: “The offer from Forth made good sense to us and the decision was taken in line with the changing market dynamics in the liner industry including the rapid escalation in vessel sizes.”
Market experts also are of the opinion that the company struck a great deal.
“ DP World got a sweet deal on this … one which gives the company a premium on the value at which the market is valuing its portfolio,” an industry expert, who did not wish to be named, told Gulf News.
He was quick to add that the company is “not in the need of cash”.
“It did not divest its stake in Tilbury because it needed cash — DP World has enough cash — but because it got a great deal,” he said.
Expressing a similar opinion, M.R. Raghu, senior vice-president of research at Kuwait Financial Centre (Markaz), said that the ports operator remains “one of the more profitable firms” in the Dubai World family.
Full control
“The stake was sold to a firm which already owns a third of the company and so was looking to obtain full control for synergistic and strategic reasons. It seems like a fairly straightforward and logical move,” he told Gulf News.
He added that DP World expects “growth to moderate to about seven per cent in 2012” due to tougher market conditions as against a healthy 10 per cent YoY increase it recorded in third quarter 2011. “So I imagine this divestment is a move to augment bottom line figures,” Raghu said.
The other market expert said DP World is likely to use this cash for future expansion and to continue the development of London Gateway port, which is due for opening in late 2013.
“While the company does not really need the money, this additional cash will be used for the company’s future expansion and in developing other ports,” he said.
Operating more than 60 terminals across six continents, with container handling generating around 80 per cent of its revenue, DP World currently has 11 new developments and major expansion underway in 10 countries.
And with a pipeline of expansion and development projects in key growth markets, including India, China and the Middle East, the company said it expects its capacity to rise to around 100 million TEU by 2020, in line with market demand.
$75.48m
sale of stake in Tilbury Container Services
7%
DP World’s growth expected to moderate
80%
DP World’s revenue from container handling
The stake was sold to a firm which already owns a third of the company and so was looking to obtain full control for synergistic and strategic reasons.”
M.R. Raghu
Kuwait Financial Centre
By Shweta Jain?Senior Reporter
© Gulf News 2012. All rights reserved.
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