A major improvement in the performance of former P&O-controlled ports has enabled their new owners to raise nearly US$5 billion in the biggest stock market flotation ever seen in the Middle East.
The state-owned Dubai Ports World yesterday sold just under a quarter of a business now valued at $21.58 billion through an initial public offering in Dubai at $1.30 a share - the top end of the indicative range it had set.
The float was 15 times oversubscribed with considerable investment support from the United States, a country whose politicians forced DP World to divest docks there when it took over the P&O Ports empire last year for $6.8 billion.
Mohammed Sharaf, chief executive of DP World, said the company has greatly added to the value of all the assets, including P&O. He specifically mentioned Southampton as a facility where container throughput and overall performance had greatly improved.
He stressed that DP World was anxious to get back into the US as part of its wider strategy of expanding its operations further around the globe.
The Dubai company agreed to sell the US port operations acquired with the purchase of P&O to AIG Global Investment after a security outcry about six key facilities falling into the hands of a firm from the Middle East.
DP World is the world's fourth-largest container handler with 42 managed terminals in 22 countries at a time when shipping is surging ahead with the opening up of the Chinese and Indian economies. It plans to almost double its capacity so that it can handle 90 million containers by 2017 by opening facilities in countries such as the United Arab Emirates and China.
Research by the Dubai-based Shuaa Capital, one of the banks involved in the float, suggested that DP World's net profit would rise by 55 percent next year to $564 million, rising to $630 million in 2009 and to $923 million within four years.
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