DUBAI: Dubai’s port operator DP World will acquire Economic Zones World group, which owns regional hub Jebel Ali Free Zone, for $2.6 billion, it said on Thursday.

DP World also said it will delist its thinly traded shares from the London Stock Exchange, concentrating on NASDAQ Dubai, where the company’s shares have been listed since 2007.

Both DP World and EZW are majority-owned by the government’s conglomerate Dubai World, and the move appears to be a reshuffle of government-owned assets.

Dubai World sent jitters through global markets in November 2009 when it revealed trouble repaying debt of around $25bn. It reached a debt restructuring agreement with lenders in 2011.

DP World’s move was to pre-empt the “risks of potential third-party ownership of JAFZ,” which sits next to Jebel Ali port that is operated by DP World, said chairman Sultan Ahmed bin Sulayem.

Such risk could rise from a potential move by Dubai World to sell some assets to meet debt obligations.

In addition to a cash payment of $2.6bn, the acquisition will include the assumption of $859 million of debt owned by EZW, the company said.

The proposed acquisition, which awaits the endorsement of shareholders at a general meeting on December 18, will created a “leading integrated port and free zone in the Middle East,” the company said.

Meanwhile, DP World is seeking approval from shareholders to delist from the LSE, following the upgrade of UAE stock markets from frontier to emerging market status, which allows them to attract more international investors.

DP World made its debut on the LSE in June 2011. But trading of the company’s stocks has been thin, representing only around one per cent of total trading volumes in September, it said.

“Around 99pc of our (share) trading is in Dubai,” said Bin Sulayem.

Only around 20pc of DP World’s shares are listed.

DP World has a portfolio of more than 65 marine terminals across six continents.—AFP

Published in Dawn, November 14th, 2014