DP World Raises $1B

Posted by Greg Trauthwein
Thursday, June 12, 2014
Sultan Ahmed Bin Sulayem, chairman of DP World (Courtesy DP World)

DP World took advantage of strong market conditions and scarcity value to raise a $1 billion convertible bond with a ten year lifespan on Thursday, in order to fund growth opportunities and diversify its funding sources.

The issue is a rare example of an international convertible bond from a Middle Eastern company and comes at a time when convertible bonds have drawing investors' attention following a spate of issuance by European firms.

Pricing for DP World's debut convertible issue came at the mid point of both the 1.5 to 2 percent coupon guidance and the 35 and 40 percent conversion premium above the reference share price, a statement from the company said.

The reference price, set according to the volume-weighted average price between the start and close of trading of DP World shares on Thursday, was given as $27.14.

"The proceeds from the convertible bond provide us with additional financial flexibility at an extremely low interest rate to take advantage of further organic or inorganic investment opportunities in order to enhance returns to shareholders over the medium term," Sultan Ahmed Bin Sulayem, chairman of DP World, said in the statement.

From a pricing perspective, the coupon level was attractive for DP World when compared with other regular debt issues by the likes of Emaar Malls Group, according to Ali Adou, senior vice president, asset management at The National Investor, referring to the $750 million sukuk sold on Wednesday.

DP World is also in talks with lenders to triple the size of an existing $1 billion loan, as well as extend the lifespan and cut the interest rate, seeking to leverage investors' renewed confidence in the emirate and the fact banks have plenty of cash to lend to reduce its borrowing costs.

While the size of investor orders for the convertible bond wasn't disclosed, a banker working on the deal said the total amount was very comfortably covered.

The banker said investors were drawn to a rare opportunity to secure bonds belonging to a Middle Eastern firm as well as a ports operator in a sector which would benefit from global economic growth in the coming years.

The last major convertible bond sold by a Gulf company was in May 2013 when National Bank of Abu Dhabi completed a $465 million, five-year convertible that was later raised to $500 million. Pricing came with a 1 percent coupon and a 30 percent conversion premium.

However, a number of European corporates have issued convertibles in the last two weeks, including French telecoms firm Alcatel-Lucent, Swiss duty free group Dufry , and French oil and gas group Maurel & Prom.

JP Morgan acted as global coordinator for DP World's convertible sale and Citigroup, HSBC and UBS were classed as joint bookrunners.

The company can buy back the bonds after three years, should the DP World share price be 30 percent above the value of the reference share price or if more than 85 percent of the bonds have been converted by investors. Investors can have the company buy back the bonds at years four and seven. (Editing by Andrew Torchia and Sophie Walker)

(By David French and Archana Narayanan, Reuter)

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter June 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Ports

Lerwick Port Set to Receive Largest Cruise ship

Lerwick Harbour’s record-breaking cruise season will hit the first of several milestones this season on Thursday (30 June) with the arrival of Azura, the largest

NYK Vessel First to Make Commercial Transit through Expanded Panama Canal

On June 27, the expanded Panama Canal opened for commercial transit, and Lycaste Peace, a very large liquefied petroleum gas (LPG) carrier operated by NYK, was

MSC Partners with Peel Ports for Liverpool2 Trials

Mediterranean Shipping Company (MSC) is pleased to be working with Peel Ports as commissioning work for Liverpool2 gets into full swing.   Berthing and Marine

Finance

CMA CGM Crosses 91.05% Ownership Threshold of NOL

CMA CGM S.A has crossed the compulsory acquisition ownership threshold in Neptune Orient Lines Limited (NOL).    Following its all-cash voluntary conditional

Navios Partners Appoints Lampros Theodorou as Director

US-listed owner and operator of container and dry bulk vessels Navios Maritime Partners has appointed Lampros Theodorou to its Board of Directors.   “We are delighted Mr.

Baltic Index Rises for Fifth Consecutive Session

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, rose on Tuesday for a fifth straight session on stronger demand across all vessel segments.

Container Ships

Essberger Fleet Moves to Marlink’s Sealink VSAT Service

The Hamburg headquartered John T. Essberger (JTE) Group will migrate the primary communication systems of its entire fleet to Sealink, Marlink’s global maritime broadband VSAT service.

EU to Accept Antitrust Offer from Maersk, MSC, 13 Others

World No.1 container liner Maersk, Swiss peer MSC and 13 other shipping firms are set to escape possible penalties as EU antitrust regulators plan to accept their offer to end a five-year probe,

EU to Accept Antitrust Offer From Maersk, MSC, 13 Others

World No.1 container liner Maersk, Swiss peer MSC and 13 other shipping firms are set to escape possible penalties as EU antitrust regulators plan to accept their offer to end a five-year probe,

Logistics

Six-Month High for Service Reliability

Ocean carriers achieved a six-month high for liner service reliability in May, according to Carrier Performance Insight, the online schedule reliability tool provided by Drewry Supply Chain Advisors.

CMA CGM Crosses 91.05% Ownership Threshold of NOL

CMA CGM S.A has crossed the compulsory acquisition ownership threshold in Neptune Orient Lines Limited (NOL).    Following its all-cash voluntary conditional

MSC Partners with Peel Ports for Liverpool2 Trials

Mediterranean Shipping Company (MSC) is pleased to be working with Peel Ports as commissioning work for Liverpool2 gets into full swing.   Berthing and Marine

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Navigation Offshore Oil Pipelines Salvage Ship Electronics Ship Simulators Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0722 sec (14 req/sec)