DP World and Caisse de dépôt et placement du Québec (CDPQ), Canada’s second largest pension fund, are creating a US$3.7 billion financial vehicle to invest globally.
The new platform, in which the Dubai ports operator will hold a 55 per cent stake, will be used to invest in ports and terminals worldwide, excluding the UAE. While most of the money will be used for existing projects, a quarter of the funds will be dedicated to new developments.
“The opportunity landscape in the port and terminal sector remains significant and this partnership offers us greater flexibility to capitalise on these opportunities while maintaining a strong balance sheet and retaining control,” said Sultan Ahmed bin Sulayem, DP World group chairman and chief executive.
CDPQ will acquire a 45 per cent stake of DP World’s Canadian container terminals on the Pacific coast in Vancouver and Prince Rupert, valued at $640 million.
Mr bin Sulayem said that the partial monetisation of those assets will strengthen DP World’s balance sheet.
DP World, operator of 77 marine and inland terminals spanning six continents, has been able to maintain its growth despite challenging market conditions, particularly those most affected by the weak oil prices.
Mr bin Sulayem said in October new developments would drive the operator’s growth to counter the near-term global trade growth outlook.
Yuvraj Narayan, the group’s chief financial officer, said that next year’s spending would be $1.2bn and taper down to $950m until 2020.
The new investment platform, which has yet to be named, will also play into the company’s growth strategy to potentially generate positive cash flows.
“Through this new investment platform with DP World, a world-class port and terminal operator, CDPQ will have unique access to high-quality transactions, and the opportunity to invest in the best port infrastructure worldwide,” said Michael Sabia, president and chief executive of CDPQ.
CDPQ is the eighth largest global infrastructure investor in the world, with C$254.9bn (Dh704.39bn) of net assets under management, according to Boston Consulting Group. Last year the company had C$13bn in infrastructure assets, a 28 per cent increase from C$10.1bn in 2014.
“We look forward to leveraging our in-house infrastructure expertise and DP World’s strong track record in the port sector to deliver attractive long-term returns for our clients,” Mr Sabia said.
lgraves@thenational.ae
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