Abraaj Capital enters talks to buy Dubai ports unit stake(2)

MENA private equity group Abraaj Capital is reported to have entered talks with government owned Dubai World to buy a 15 percent stake in its ports operator DP World. The proceeds could go towards helping Dubai World’s real estate arm, Nakheel, pay down debts.

Dubai-based Abraaj Capital is in talks to buy a stake of at least 15 percent in the ports unit of government owned Dubai World, according to a report by Zawya Dow Jones.

Dubai world is seeking to offload the stake in DP World in an effort to shore up its finances, the report said. The stake could cost up to $900 million based on DP World’s closing stock price on Sunday.

DP World: offloading an
equity stake to pay debt

The report cited two government officials close to the matter. “Abraaj submitted an offer and is in talks with the decision makers on the deal,” one of the officials said, although he added that the offer was not made officially.

It said that a sale of a stake in DP World could enable Dubai World to make inroads into the debt position of its real estate arm, Nakheel.

Dubai World confirmed it was in talks about a sale with a regionally based private equity firm on the Nasdaq Stock Exchange on Sunday but would not comment further.

Abraaj Capital, which was ranked 54th in the PEI 300 having raised $6.494 billion over the last five years, declined to comment.

Deutsche Bank is advising Dubai World on the deal and Credit Suisse Group is working with Abraaj, the report says, citing a source familiar with the deal.

Shares in Dubai World jumped on the news but have since fallen to a similar level to before the news of the deal leaked. The company’s shares have plummeted by 72 percent since it listed in 2007.