Dubai-based trade and logistics giant DP World brought in M&A consultants to help sell a stake in the Jebel Ali Free Zone (Jafza) – a thriving Special Economic Zone in Dubai that nearly supports of $ 100 billion in trade.
DP World first took a stake in Jafza for over $ 2.5 billion in 2014. The state-owned logistics giant was privatized last year – and is now seeking to raise capital and strengthen its balance sheet through the sale of stakes in some of its Jafza assets.
Bank pillar negotiators JP Morgan, Standard Chartered and First Abu Dhabi Bank have all been called in to support the sale, with other consultants involved in the transaction (strategic, financial) unknown at the time of writing. The advisory team is responsible for assessing interest in Jafza’s participation and finding potential buyers, who are likely to be numerous.
Jafza was established in 1985 as a free economic zone, allowing 100% foreign ownership without any restrictions on repatriation of capital, currency or recruitment from abroad – all under a 0% tax regime. on corporations, income tax and import / export duties. And these are just a few of the advantages of the region.
The zone was created to attract foreign investment, and that is exactly what it has done. A set of about 20 companies that started in Jafza has now grown into a troop of over 8,000 companies from over 100 countries, including nearly 100 Global Fortune 500 companies. With a business value of $ 99.5 billion , Jafza contributes nearly 24% of Dubai’s GDP and supports more than 135,000 jobs.
This is in addition to attracting around 24% of Dubai’s foreign direct investment – a tempting prospect for investors and potential buyers. The Mubasher publication suggests that an equity stake in Jafza will match some infrastructure funds, private equity players and other institutionalized investors in the region.
A sale would raise much-needed capital for DP World, a global specialist in ports, parks and economic zones, logistics, maritime services and smart commerce. The recently privatized company has a global workforce of over 53,000 people in more than 130 countries and will benefit from a much needed injection of capital.