Dubai’s DP World in $500m deal to buy Chile port firm

Dubai’s DP World said it would offer $502 million for 100 percent equity ownership. (Reuters)
Updated 13 January 2019

Dubai’s DP World in $500m deal to buy Chile port firm

  • Pulogsa operates concession for Puerto Central in San Antonio and owns and operates Puerto Lirquen terminal
  • DP World is one of the world’s largest port operators

LONDON: The Dubai-based DP World is set to buy a 71.3 percent stake in the Chilean port services firm Puertos y Logistica, known as Pulogsa.

The move will give DP World exposure to several terminals in Chile, with Pulogsa holding a long-term concession for Puerto Central (PCE) in San Antonio, as well as owning and operating Puerto Lirquen (PLQ) terminal.

The Dubai port operator said it has entered into an agreement to acquire the stake from Minera Valparaiso and other shareholders associated with the Matte Group.

Under a tender process to acquire all outstanding shares of the business, DP World will offer $502 million in consideration for 100 percent equity ownership, according to a statement.

The acquisition will be financed from existing balance sheet resources, and is expected to close in the first half of 2019, the statement said.

Pulogsa, which is listed on the Santiago stock exchange, had net financial debt of $226 million as at Sept. 30, 2018, the statement added.

“We are delighted to extend our global footprint with a major entry into Chile, Latin America’s most developed economy, with attractive growth prospects and a dynamic business environment,” said DP World Group Chairman and CEO Sultan Ahmed bin Sulayem.

“These new assets will allow DP World to serve cargo owners and shipping lines at five key gateways on the west coast of South America.”

The PCE terminal, in San Antonio, is one of Chile’s largest container ports, with a capacity of over 1 million twenty-foot-equivalent units (TEUs), a standard measurement in shipping.

“PCE and PLQ are both ‘best in class’ terminals in their respective markets, with long-term operating rights, strong cargo diversification and significant capability for expansion. The overall value proposition for these terminals is compelling and the addition of capacity to our portfolio will help drive long-term value to all our stakeholders,” said Sulayem.

$8bn blow to Erdogan as investors flee Turkey

Updated 09 July 2020

$8bn blow to Erdogan as investors flee Turkey

  • Overseas holdings in Istanbul stock exchange are at lowest in 16 years

ANKARA: Foreign capital is flooding out of Turkey in a massive vote of no confidence in President Recep Tayyip Erdogan’s economic competence.
Overseas investors have withdrawn nearly $8 billion from Turkish stocks since January, according to Central Bank statistics, reducing foreign investment in the Istanbul stock exchange from $32.3 billion to $24.4 billion.
As recently as 2013, the figure was $82 billion, and foreign investors now own less than 50 percent of stocks for the first time in 16 years.
“Foreign investment has left Turkey for several reasons, both internal and external,” Win Thin, global head of currency strategy at Brown Brothers Harriman, told Arab News.
“Externally, investors fled riskier assets like emerging markets during the height of the coronavirus pandemic. Some of those flows are returning, but investors are being much more discerning and Turkey does not seem so attractive.”
In terms of internal factors, Thin said that Turkish policymakers had made it hard for foreign investors to transact in Turkey. “This includes real money clients, not just speculative.
“By implementing ad hoc measures to try and limit speculative activity, Turkey has made it hard for real money as well. Besides these problems, Turkey’s fundamentals remain poor compared to much of the emerging markets.”
Erdogan allies claim international players are manipulating the Istanbul stock exchange through automated trading, and have demanded action to make it difficult for them to trade in Turkish assets.
Goldman Sachs, JPMorgan, Merrill Lynch, Barclays and Credit Suisse were banned this month from short-selling stocks for up to three months, and this year local lenders were briefly banned by the banking regulator from trading in Turkish lira with Citigroup, BNP Paribas and UBS
JPMorgan was investigated by Turkish authorities last year after the bank published a report that advised its clients to short sell the Turkish lira.
MSCI, the provider of research-based indexes and analytics, warned last month that it may relegate Turkey from emerging market status to frontier-market status because of bans on short selling and stock lending.
With the market becoming less transparent, overseas fund managers, especially with short-term portfolios, are unenthusiastic about the Turkish market and are becoming more concerned about any forthcoming introduction of other liquidity restrictions.
The exodus of foreign capital is likely to undermine Turkey’s drive for economic growth, especially during the coronavirus pandemic when employment and investment levels have gone down, with the Turkish lira facing serious volatility.