Dubai World makes first major asset sale since crisis
By Dinesh Nair and Mirna Sleiman
DUBAI (Reuters) - Dubai World DBWLD.UL, the state-linked group whose $25 billion of debt brought the emirate to the brink of financial collapse in 2009, has sold one of its UK assets as part of its efforts to repay creditors.
A unit of Toronto-based investment company Brookfield Asset Management (BAMa.TO: Quote) has bought logistics warehouse developer Gazeley from Dubai World subsidiary Economic Zones World (EZW), the Canadian firm said in a statement on Tuesday.
It did not disclose the value of the transaction.
The sale is the first major divestments of a foreign asset by Dubai World since it agreed on a debt deal with creditors in 2011. The restructuring agreement promised full repayment to creditors through a series of disposals of overseas assets bought at peak prices in 2006-07.
Gazeley is one of four businesses held by EZW, which operates technology, logistics and industrial parks as well as the Jebel Ali Free Zone (JAFZA), a business district, under the Dubai World Group umbrella. Its portfolio includes 524,000 square meter of assets and land bank of 1.3 million square meters.
Proceeds from the sale of Gazeley are expected to go towards the repayment of a $1.2 billion loan secured by associate firm JAFZA in June last year.
EZW had pledged up to $300 million for JAFZA from the proceeds raised by the Gazeley sale, and should the sale be completed, funds will be used to part-repay the bank facility, a company prospectus stated.
The logistics warehouses firm was set aside for sale in 2012 as part of Dubai World's restructuring deal. Gazeley had hired Citigroup Inc (C.N: Quote) for the sale in 2011, banking sources told Reuters at the time. Continued...