Dubai-based port operator DP World and Caisse de Depot et Placement du Quebec (CDPQ), a global investment group, announced on Monday a $5 billion investment in three of DP World’s flagship assets in the UAE.

CDPQ will invest $2.5 billion in Jebel Ali Port, Jebel Ali Free Zone and National Industries Park through a new joint venture, in which it will hold an approximate 22% stake, the balance of the transaction being financed by debt.

Tranche 1 ($5 billion) of the transaction is expected to close in the second or third quarter of 2022, and Tranche 2 (up to $3 billion) is expected to close in the fourth quarter, DP World said. in a press release.

Other long-term investors will have the opportunity to acquire an additional stake of up to $3 billion, he added.

The transaction involves a total enterprise value of around $23 billion for the three assets, he added.

Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World, said the transaction allows DP World to reduce its net leverage.

The company previously said it expects to achieve its debt target of less than 4.0x adjusted net debt to EBITDA (earnings before interest, tax, depreciation and amortization) ratio by the end of 2022.

The Jebel Ali Port, Free Zone and National Industries Park together comprise the supply and logistics chains of more than 8,700 companies around the world. The three assets generated pro forma revenue of $1.9 billion in 2021, the port operator said.

The assets will remain fully consolidated within the DP World group, and day-to-day operations, customers, service providers and employees will not be affected.

CDPQ, a Canadian pension fund, has already partnered with ports and terminals around the world.

(Reporting by Brinda Darasha; editing by Seban Scaria)

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