DP World, the largest port operator in the Middle East says its parent company, Dubai World, has received an approach from a private equity group about buying a stake in the company.
A deal could trigger renewed interest in the region's private equity industry, which has seen buyout deals slow to a trickle since the onslaught of the financial crisis.
The discussions with the private equity company "may or may not result in a transaction regarding a minority stake in DP World", the Dubai government-owned company said today in a statement posted on the NASDAQ Dubai bourse website.
Abraaj Capital, one of the region's biggest buyout firms, may be seeking to acquire a stake in the company, according to a source familiar with the matter. Abraaj is interested in acquiring a significant minority stake, the source said, adding that the numbers were still being worked out.
DP World, which is 77 per cent owned by Dubai World, issued a statement to the stock exchange confirming it had received an approach from a regional private equity firm, after its shares surged more than 14 per cent last Thursday.
A stake in DP World would allow Abraaj to take advantage of any rebound in global container shipping, after the sector collapsed last year with the global economic downturn. The company owns 49 ports around the world and handled 46.8 million 20-foot equivalent container units last year, an increase of 8 per cent on 2007. Any deal would mark the first time a Dubai government-owned company has sold a stake to a private equity firm.
However, a sale may also affect DP World's credit rating, said Martin Kohlhase, an analyst at Moody's in Dubai. "We would have to assume less government support, the smaller the government stake is," he said.
Mr Kohlhase said that it was too early to comment in detail as it was still unclear whether Dubai World intended to sell a stake, and how big such a stake would be.
Last month, Moody's confirmed DP World's "A1" rating, albeit with a negative outlook. Government-related enterprises such as DP World benefit from the assumed support of their owners.
The economic downturn has hurt DP World as global trade has declined sharply, dragging its shares to an all-time low of US$0.17 (Dh0.62) in March, down from $1.30 when it floated in Nov 2007. "The volume deceleration ? shows little sign of easing in the foreseeable future," DP World said recently, adding that it would consider all available options to address the fall in its share price. The stock closed 1.4 per cent higher today and has gained 21.7 per cent this year.
Sharp declines in property prices and the dearth of liquidity have made it hard for government-owned entities to repay their loans and pay their clients. The situation has been alleviated by a $10 billion bond. Nevertheless, Nakheel, the developer also owned by Dubai World, has indicated it may be forced to renegotiate the terms of a $3.5bn sukuk due in November.
Abraaj, which is based in Dubai and has about $6bn in funds under management, is one of the largest players in the Middle East and number 54 worldwide, according to PEI Magazine. The chief executive, Arif Naqvi, has pledged to complete an average of four to five deals annually.
Last month, the company bought a stake in the Dubai-based publisher Mediaquest, its first deal this year.
In 2006, Abraaj bought a 25 per cent stake in Egypt's EFG-Hermes, the regional investment bank, which it sold for $1.1bn - doubling its money - to Dubai Financial Group one year later.
In June 2007, Abraaj spent $1.4bn on the Egyptian Fertilisers Company (EFC), Egypt's largest private sector fertiliser manufacturer and exporter, in what was the biggest private equity acquisition in the Middle East and North Africa until then.
Other regional private equity houses include Egypt's Citadel Capital and the UAE's Dubai International Capital.
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Tax authority targets shisha levy evasion
The Federal Tax Authority will track shisha imports with electronic markers to protect customers and ensure levies have been paid.
Khalid Ali Al Bustani, director of the tax authority, on Sunday said the move is to "prevent tax evasion and support the authority’s tax collection efforts".
The scheme’s first phase, which came into effect on 1st January, 2019, covers all types of imported and domestically produced and distributed cigarettes. As of May 1, importing any type of cigarettes without the digital marks will be prohibited.
He said the latest phase will see imported and locally produced shisha tobacco tracked by the final quarter of this year.
"The FTA also maintains ongoing communication with concerned companies, to help them adapt their systems to meet our requirements and coordinate between all parties involved," he said.
As with cigarettes, shisha was hit with a 100 per cent tax in October 2017, though manufacturers and cafes absorbed some of the costs to prevent prices doubling.
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
What you as a drone operator need to know
A permit and licence is required to fly a drone legally in Dubai.
Sanad Academy is the United Arab Emirate’s first RPA (Remotely Piloted Aircraft) training and certification specialists endorsed by the Dubai Civil Aviation authority.
It is responsible to train, test and certify drone operators and drones in UAE with DCAA Endorsement.
“We are teaching people how to fly in accordance with the laws of the UAE,” said Ahmad Al Hamadi, a trainer at Sanad.
“We can show how the aircraft work and how they are operated. They are relatively easy to use, but they need responsible pilots.
“Pilots have to be mature. They are given a map of where they can and can’t fly in the UAE and we make these points clear in the lectures we give.
“You cannot fly a drone without registration under any circumstances.”
Larger drones are harder to fly, and have a different response to location control. There are no brakes in the air, so the larger drones have more power.
The Sanad Academy has a designated area to fly off the Al Ain Road near Skydive Dubai to show pilots how to fly responsibly.
“As UAS technology becomes mainstream, it is important to build wider awareness on how to integrate it into commerce and our personal lives,” said Major General Abdulla Khalifa Al Marri, Commander-in-Chief, Dubai Police.
“Operators must undergo proper training and certification to ensure safety and compliance.
“Dubai’s airspace will undoubtedly experience increased traffic as UAS innovations become commonplace, the Forum allows commercial users to learn of best practice applications to implement UAS safely and legally, while benefitting a whole range of industries.”
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The biog
Name: Atheja Ali Busaibah
Date of birth: 15 November, 1951
Favourite books: Ihsan Abdel Quddous books, such as “The Sun will Never Set”
Hobbies: Reading and writing poetry
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
THE LIGHT
Director: Tom Tykwer
Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger
Rating: 3/5
The biog
Fast facts on Neil Armstrong’s personal life:
- Armstrong was born on August 5, 1930, in Wapakoneta, Ohio
- He earned his private pilot’s license when he was 16 – he could fly before he could drive
- There was tragedy in his married life: Neil and Janet Armstrong’s daughter Karen died at the age of two in 1962 after suffering a brain tumour. She was the couple’s only daughter. Their two sons, Rick and Mark, consulted on the film
- After Armstrong departed Nasa, he bought a farm in the town of Lebanon, Ohio, in 1971 – its airstrip allowed him to tap back into his love of flying
- In 1994, Janet divorced Neil after 38 years of marriage. Two years earlier, Neil met Carol Knight, who became his second wife in 1994