DP World sells Hong Kong assets

Dubai-based global ports operator DP World Limited has announced the sale of its stakes in two container terminals and a logistics centre in Hong Kong and has profited $151 million from the deal.

In a media statement, DP World said it has entered into two transactions to monetise its interests in the assets for $742 million as part of a rejig of assets in favour of fast-growing emerging markets.

“We believe Hong Kong will continue to be a very interesting market however, our presence was small relative to the market. This reorganisation, forming a strategic partnership and partially monetising some assets, allows us to realise value and recycle capital into new, fast growing opportunities in other markets,” said Sultan Ahmed bin Sulayem, Chairman of DP World.

“Combined, these transactions value our assets in Hong Kong at 14.9x times 2012 EV/EBITDA which, together with the proceeds of $742 million, make these very attractive for DP World,” added Yuvraj Narayan, Chief Financial Officer of DP World.

“The transactions will see DP World monetise 75 per cent of its interests in CSX World Terminals Hong Kong Limited (CT3), which operates berth 3 of the Kwai Chung Container Terminal (‘CT3’) and ATL Logistics Centre Hong Kong Limited (ATL), a logistics centre located alongside CT3, and 100 per cent of its interest in Asia Container Terminal Ltd (ACT), which operates Asia Container Terminal 8 West (CT8),” it said.

The total consideration to be received by DP World for the two transactions is $742 million including the repayment of certain shareholder loans, the media statement noted.

The proceeds will go towards maintaining a strong capital position. “The total net gain is expected to be approximately $151 million, subject to transaction costs and currency movements.”

DP World will divest 75 per cent of its equity interests in CT3 and ATL, for a cash consideration of $463 million, to Goodman Hong Kong Logistics Fund, to form a strategic partnership in respect of these assets. 

“We are delighted that Goodman is joining us as strategic partners in Hong Kong. Their experience in the logistics sector, combined with our expertise as a global port operator, will ensure that our focus is on delivering the highest level of service to our customers. We look forward to building on our successful track record of operating container terminals in Asia,” said Mohammed Sharaf, Group Chief Executive of DP World.

“As part of the strategic partnership, DP World will continue to manage the port operations,” the statement read.

DP World will also divest all its 55.16 per cent interest in Asia Container Terminals Holdings, the holding company of the entity that owns and operates CT8, for a cash consideration of HK$2,161 million ($279 million), to Hutchison Port Holdings Trust (HPH Trust).

As at 31 December, 2012, the value of the assets disposed of was $653 million and they contributed a total of $39 million to DP World’s gross profit.

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