Dubai - Arabstoday
Global container port operator DP World said on Monday it would pay off $3 billion of debt months before it becomes due. The Dubai-based group, which announced another record year for container handling, with an increase of 10 per cent in 2011, said it would use existing cash resources to repay all $3 billion outstanding under its revolving credit facility from April 4 to April 10, six months earlier than the debt’s October maturity date. “As a result, the total debt would now be approximately $4.7 billion, while existing cash balance would total $1.2 billion,” the company said in a statement. “As at 31 December 2011, DP World had $4.2 billion of cash balances, including cash flow generated from its portfolio of global terminals and the proceeds of the monetisation of the five terminals in Australia,” the company said. The world’s third biggest port operator said the cash repayments would allow it to cancel $2 billion of the existing revolving credit facility, while the $1 billion undrawn facility would be replaced by a new five-year credit agreement for the same amount. “We are in the final stage of agreeing documentation with the banks that have committed to this new facility and expect it to replace the existing facility shortly,” the company said. “The new facility will be used to provide DP World with flexibility to manage cash flow and investment in our portfolio. We have no immediate need to draw down the new facility,” it said. DP World, a division of Dubai World conglomerate, manages more than 60 marine cargo terminals across the globe. The company currently has 11 new developments and major expansions under way in 10 countries. “We are delighted to be in a position to repay all outstanding $3 billion of our revolving credit facility six months ahead of maturity,” said DP World chairman Sultan Ahmed bin Sulayem. “DP World has a very strong balance sheet not least because of the strong cash generative nature of our global operations. We have created a balance sheet that allows DP World to meet the long-term strategic requirements for investment into profitable growth opportunities, whilst maintaining a much disciplined approach to capital allocation,” said Sulayem. Group chief executive officer Mohammed Sharaf, said while the company has no immediate plans to access the new facility, it allows to draw down and pre-pay cash as needed, providing timely and flexible access to cash as DP World continue to invest in its global portfolio to deliver profitable growth. In 2011, DP World, which is listed on Nasdaq and London Stock Exchange, handled 54.7 million TEU (twenty-foot equivalent container units) across its global portfolio, an increase of 10 per cent against 2010. The volume growth was equally strong at nine per cent when compared with last year. In the UAE, the port operator recorded a 12 per cent increase in volume with a record throughput of 13 million TEU. “Because of this growth and because shipping lines are purchasing ever larger vessels, we are adding one million TEU to Terminal 2 and developing a new terminal with capacity of four million TEU. Together they take Jebel Ali’s total capacity to 19 million TEU by 2014,” a DP World official said. For 2012, DP World has predicted a better year. “We expect to perform better than we did in 2011,” finance director Yuvraj Narayan said.