Citi Infrastructure has agreed to pay $1.5 billion (£1 billion) to Dubai World’s port operating arm DP World to acquire 75% stake in its five Australian ports. However, DP World will continue to operate the ports of Sydney, Melbourne, Adelaide, Brisbane and Fremantle, under the terms of the contract.
DP World is raising cash on behalf of Dubai World to reduce the Latter’s debt levels. Dubai World was suffering from serious cash crunch last year and asked its creditors for more time to settle their debts. Dubai Government had bailed out the company early this year.
DP world however, put up a brave face saying Citi had approached them despite under severe pressure to reduce debt levels. Chief Executive Mohammed Sharaf said: “This was not done because we went to the market looking for partners. They approached us”.
“This is part of our strategy of continued growth in emerging markets without increasing overall leverage in our business”, he added. DP World is one of the biggest port operators of the world.
Dubai Emirates control its investments through Dubai World – which has invested in the DP World, real estates like the famous Palm Island and different foreign assets.