Dubai firm plans US divestment
The state-owned Arab company whose purchase of US port terminal assets unleashed a political firestorm expects to sell them within four to six months to a US buyer, according to a company statement.
But US House of Representatives lawmakers forged ahead with legislation to make sure the company, Dubai Ports World, sheds the US assets as promised.
The House on Wednesday was considering a provision to ban DP World from operating US ports, as part of a larger bill to fund the Iraq war.
House member Jerry Lewis, a California Republican and author of the provision to block the port deal, said: “This is a national security issue. This is a national security bill. Our goal is to
make sure that securing our ports is in America’s hands.”
DP World, which is owned by Dubai of the United Arab Emirates, last week completed its $6.8 billion purchase of Peninsular & Oriental Steam Navigation Co of London.
But amid a cacophony of US concerns about national security, the company said it would give up control of the US part of the deal – some terminal operations at six major US ports.
Speedy sale
The statement issued by the US subsidiary that DP World recently acquired, P&O Ports North America, pledged a speedy sale.
“An expedited sale process is under way and with the cooperation of the port authorities and joint venture partners, it is expected that a sale can be agreed within four to six months,” it said.
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DP World bought P&O of London |
A leading Senate critic of the ports deal, Democrat Charles Schumer of New York, expressed uncertainty about continuing to push for a vote against it.
He said investment bankers had given assurances that the sale would go ahead “to a company that has no relationship with Dubai Ports World”.
While he still had to review details, it appeared the assurances “would obviate the need for legislation” that would have blocked the company’s work at US ports, Schumer said.
The statement on the sale process said it would be supervised by executives from P&O group’s head office in London.
It said the New York office of Deutsche Bank Securities, Inc had been mandated as financial adviser for the sale.
Unrelated US buyer
New York law firm Sullivan & Cromwell LLP would be legal adviser and the Washington office of Alston & Bird LLP would assist on regulatory matters.
“All of its (P&O Ports North America’s) business will be sold to an unrelated US buyer,” the statement said on Wednesday.
“Until the sale is completed, P&O Ports North America will be operated independently from DP World in accordance with the Hold Separate Commitment announced on Feb. 26, 2006,” it added.
“An expedited sale process is under way and with the cooperation of the port authorities and joint venture partners, it is expected that a sale can be agreed within four to six months” DP World statement |
Under that commitment, the company pledged to keep the North American operations as a separate business unit.
The statement did not speculate on who might want to buy the port terminal assets, but said interested parties would be furnished with information and “invited to make offers”.
These offers would be assessed on value, but also on “continuity of management, employees and customers”.
The Bush administration in January approved the sale of P & O assets based in the US to DP World, and officials have expressed concern that the congressional reaction against the sale would send a worrying message to US allies in the Middle East as well as to foreign investors.
White House spokesman Scott McClellan said: “Now it’s important for the company to continue moving forward on what they committed to doing and we appreciate the step that they took.”