DP World Defends Financial Position

Port operator DP World says its recent sale of much of its Australian businesses was a strategic move and is not a sign that the Dubai-based company needs to raise cash or refinance its debt.

"We're not compelled into a position or being pushed into a corner due to any circumstance," Anil Wats, executive vice-president and chief operating officer, told reporters. "If at all we decide to do anything, it would be in line with the strategy or the philosophy of the organization."

DP World sold the bulk of its Australian businesses to a Citi investment fund in late December for $1.5 billion. It continues to manage the ports in Brisbane, Sydney, Melbourne, Adelaide and Fremantle.

DP World news from JOC:
Mohammed Sharaf on market volatility

The port firm plans to use the proceeds to pay down debt, which stood at just over $8 billion as of last June. Included in its liabilities is a $3 billion revolving credit line that must be paid off or refinanced by October 2012.

DP World, with operations at 49 sea cargo terminals on six continents, is owned by government conglomerate Dubai World, which last year persuaded lenders to agree to new terms on nearly $25 billion in debt. DP World and a handful of other Dubai World subsidiary companies were exempt from that process.

On Saturday, Dubai World's shipbuilding and repair arm Drydocks World - which like DP World was excluded from its parent's restructuring - said it too plans to seek new debt repayment terms. The company has an outstanding $2.2 billion loan it took out in 2008. It announced it has secured $200 million in immediate financing to cover ongoing business costs from seven of its existing lenders. That financing is good through the end of April.

Another Dubai World division, property developer Nakheel, is in talks to convince a handful of holdout creditors to sign on to a separate plan to restructure at least $10.5 billion in debt.

-- Contact Joseph Bonney at jbonney@joc.com.