Shares in DP World, the ports group that bought P&O last year, have been priced at the top end of expectations at $1.30 a share, in the face of huge demand from investors seeking haven from turbulent markets around the world.
The share offer, the first by the Dubai Government, was 15 times oversubscribed, giving the fast-growing port company a market value of almost $22 billion (£10.7 billion).
It will raise $4.96 billion from the market.
The pricing, at the top end of an indicative range of $1 to $1.30 a share, marks a huge success for the new Dubai exchange, as an emerging capital market and for Dubai World, the state-owned conglomerate owner of DP World.
DP World paid $6.8 billion for P&O, the British port operator last year, taking its assets to 42 terminals in 22 countries.
It has said that it will almost double its capacity to 90 million containers by 2017, with expansion focused on Middle Eastern countries, such as the UAE, and China.
The company grew by 18 per cent last year, outstripping market growth of approximately 11 per cent.
A pipeline of port expansion projects and new openings in the UK, Dubai, Romania and Turkey will increase throughput from 48.6 million twenty foot equivalent units (TEUs) to 81 million TEUs by 2011.
Dubai’s Jebel Ali port is DP World’s biggest operation, followed by Qingdao, of China, and Nhava-Sheva, of India.
DP World’s net profit is expected to rise by 55 per cent next year to $564 million, $630 million in 2009 and as much as $923 million in 2011, according to Shuaa Capital, the Dubai-based bank that is one of the four arranging the flotation.
Sultan Ahmed Bin Sulayem, the chairman of Dubai World and of DP World, said: “The fact that the IPO has been so heavily oversubscribed reflects the market’s confidence in the business, its management, and the company’s potential in the future.”
He added: “There was a strong demand for the shares internationally amongst institutions … DP World will have a solid base of international investors who are looking to grow value over time. Orders were particularly strong from institutional investors in the UAE and in the US and Europe.”
Dubai World, the conglomerate that owns DP World, sold about 23 per cent of the company, raising $4.96 billion.
It originally set out to sell 17 per cent of the group, but increased the placing in the face of such huge demand.
The flotation is the largest in the region, comfortably surpassing an IPO by Saudi Telecom in 2003 that raised over $4 billion.
Retail investors will get 10 per cent of the shares on offer.
Holders of $3.5 billion of bonds that DP World’s owner at the time — Ports, Customs & Free Zone Corp — sold last year, will get 25 per cent and institutional investors the remainder.
The share offer, the first by the Dubai Government, was 15 times oversubscribed, giving the fast-growing port company a market value of almost $22 billion (£10.7 billion).
It will raise $4.96 billion from the market.
The pricing, at the top end of an indicative range of $1 to $1.30 a share, marks a huge success for the new Dubai exchange, as an emerging capital market and for Dubai World, the state-owned conglomerate owner of DP World.
DP World paid $6.8 billion for P&O, the British port operator last year, taking its assets to 42 terminals in 22 countries.
It has said that it will almost double its capacity to 90 million containers by 2017, with expansion focused on Middle Eastern countries, such as the UAE, and China.
The company grew by 18 per cent last year, outstripping market growth of approximately 11 per cent.
A pipeline of port expansion projects and new openings in the UK, Dubai, Romania and Turkey will increase throughput from 48.6 million twenty foot equivalent units (TEUs) to 81 million TEUs by 2011.
Dubai’s Jebel Ali port is DP World’s biggest operation, followed by Qingdao, of China, and Nhava-Sheva, of India.
DP World’s net profit is expected to rise by 55 per cent next year to $564 million, $630 million in 2009 and as much as $923 million in 2011, according to Shuaa Capital, the Dubai-based bank that is one of the four arranging the flotation.
Sultan Ahmed Bin Sulayem, the chairman of Dubai World and of DP World, said: “The fact that the IPO has been so heavily oversubscribed reflects the market’s confidence in the business, its management, and the company’s potential in the future.”
He added: “There was a strong demand for the shares internationally amongst institutions … DP World will have a solid base of international investors who are looking to grow value over time. Orders were particularly strong from institutional investors in the UAE and in the US and Europe.”
Dubai World, the conglomerate that owns DP World, sold about 23 per cent of the company, raising $4.96 billion.
It originally set out to sell 17 per cent of the group, but increased the placing in the face of such huge demand.
The flotation is the largest in the region, comfortably surpassing an IPO by Saudi Telecom in 2003 that raised over $4 billion.
Retail investors will get 10 per cent of the shares on offer.
Holders of $3.5 billion of bonds that DP World’s owner at the time — Ports, Customs & Free Zone Corp — sold last year, will get 25 per cent and institutional investors the remainder.