Dubai-owned port operator DP World has made a request to lenders to cut the price on a five-year credit facility by a third, two unnamed banking sources told Bloomberg.
The world’s third-biggest port operator, which is owned by Dubai World, is seeking a reduction of 1.5 percentage points in order to take advantage of falling interest rates, the sources said.
On Thursday it was reported DP World was in talks with lenders to triple the size of an existing $1 billion loan, as well as extend the lifespan and cut the interest rate, seeking to take advantage of investors’ renewed confidence in the emirate.
The firm is aiming to raise the loan to $3bn, four banking sources said, speaking on condition of anonymity as the information isn’t public.
Last year, Dubai Duty Free, Emaar Properties and a secured loan for the emirate’s Roads and Transport Authority backed by revenue from the Salik toll network were all renegotiated down, in some case by more than half their original cost.
In March the operators said domestic capacity constraints and tough market conditions were to blame after it reported declines in annual revenue and container volumes.
Annual profit attributable to shareholders rose 10.9 percent to $604m in 2013, this compares with a profit of $545m in 2012.
DP World’s consolidated volumes fell 3.8 percent to 26.1m TEU – or twenty-foot equivalent container units – in 2013, down from 27.1 million a year earlier.
“Market conditions in the Asia Pacific and Indian Subcontinent region were challenging, particularly in the first half of 2013,” a company statement to the Nasdaq Dubai bourse.
“Weaker than expected GDP growth in Asia combined with a depreciating currency and divestments and monetisations impacted reported volumes.”
DP World’s annual revenue for 2013 was $3.07bn, down 1.5 percent on 2012.
“Market conditions in the Middle East, Europe and Africa region were mixed. Resilience in our UAE and Africa portfolio mitigated the weaker markets elsewhere,” the company said, adding it had faced capacity constraints at key locations including its home port of Jebel Ali.
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