DP World to repay $3B October loan early with cash
Repayment to take place between April 4 to 10; Operator's cash balance will be $1.2 billion after repayment; DP World cancels $2 bln existing revolving credit facility
March 26, 2012 9:12 by kippreport
DP World, the world’s third-largest port operator, will repay a $3 billion loan six months ahead of schedule, it said on Monday, the latest Dubai entity to pay off debt early this year.
The firm, one of the more profitable assets of debt-laden Dubai World, said the repayments will take place between April 4 to 10, ahead of its October maturity.
The payment will reduce DP World’s total debt to approximately $4.7 billion, it said in a regulatory filing on Nasdaq Dubai, and leave its cash balance at $1.2 billion.
Other Dubai firms have moved to pay off obligations early as the emirate recovers from its 2009 debt crisis.
Dubai Holding Commercial Operations Group, a unit of Dubai Holding, repaid a $500 million bond several days ahead of its February maturity while utility Dewa said it would pay off $327 million securitisation prior to its November maturity.
Investors are still focused on refinancing risks related to $3.3 billion bonds due from DIFCI Investmentsand Jebel Ali Free Zone Authority this year.
On Monday, DP World said it would cancel $2 billion of the existing revolving credit facility and replace it with a new $1 billion five-year revolving credit facility.
“Whilst we have no immediate plans to access the new facility, it allows us to draw down and pre-pay cash as needed, providing timely and flexible access to cash as we continue to invest in our global portfolio to deliver profitable growth,” Chief Executive Officer Mohammed Sharaf said in a statement.
The global ports operator was in talks with banks for a $1 billion syndicated loan to replace the existing $3 billion deal, Reuters reported last month.
DP World’s original $3 billion loan was arranged by Barclays , Citigroup, Deutsche Bank and Royal Bank of Scotland in 2007.
The operator, which is relying on its emerging markets focus to help offset a potential economic slowdown, handled 54.7 million twenty-foot equivalent container units (TEU) in 2011 across all its terminals, compared with 49.6 million TEUs in 2010.
DP World has two bonds outstanding. Its $1.5 billion 6.25 percent sukuk maturing 2017 was bid at 104.6 levels on Monday morning, yielding 5.23 percent, slightly off the bid price of 104.68 levels on Friday.
By Praveen Menon