The deal worth A$ 1.5 billion (US$1.5bn) includes the repayment of certain intercompany balances owing from DP World Australia to DP World Limited.
In a statement DP World said that the total proceeds will go towards reducing DP World’s net debt as part of its overall strategy to improve balance sheet flexibility. Completion, subject to regulatory approvals, is expected towards the end of the first quarter of 2011.
Management and staff of DP World Australia will be retained.
DP World has been operating terminals in Australia for over five years during which time all its terminals have undergone significant upgrades including investment in new quay side cranes.
The company’s Australian operations include container terminals in Brisbane, Sydney, Melbourne, Adelaide and Fremantle with capacity to handle in excess of 3.5m teu annually, representing approximately 50% of the total Australian container market. It recently renewed its long-term concessions in Adelaide, Brisbane and Sydney.
For the 12 months to 31 December 2009, DP World Australia generated equity-adjusted earnings before interest, tax, depreciation and amortisation of A$ 96 million (US$95.6m).
Yuvraj Narayan, chief financial officer of DP World commented, “This strategic partnership provides a great opportunity for DP World to remain actively involved in Australia whilst delivering on our strategy to monetise assets as part of DP World’s ongoing goal to reduce leverage and focus on higher margin markets”.