DP World nets $5bn in record flotation

Dubai-owned DP World, the world's fourth largest container port operator, has raised$4.96bn (£2.4bn) in the Middle East's biggest ever initial public offering.

The $1.30-a-share offering, the first by the government of Dubai, values the company at $21.6bn.

DP World said Dubai's sale of a 23 per cent stake in the company was 15 times oversubscribed, and came at the top of the indicative range as investors seek a haven from the turbulence in world markets.

The move will be the biggest test yet for the emirate's two-year-old stock exchange, where the shares will trade from Monday. The Dubai International Financial Exchange was set up to operate according to international regulatory standards in a region where bourses fall short of peers in Europe and the United States.

"We are delighted with the response," chairman Sultan Ahmed Bin Sulayem said yesterday. "The fact the IPO has been so heavily oversubscribed reflects the market's confidence. DP World will have a solid base of international investors."

He added that orders were particularly strong from institutional investors in the United Arab Emirates and in the US and Europe, but also from retail investors across the Gulf region.

Retail investors will get 10 per cent of shares on offer. Due to the high demand for shares indicating that appetite for infrastructure assets remains strong despite the credit crunch, DP World upped the size of its sale to 23 per cent of equity from 20 per cent.

DP World, which operates 42 terminals in 22 countries, bought the UK operator P&O for $6.9bn in 2006. A pipeline of new projects is expected to almost double capacity at the company within 10 years as it expands in countries including the United Arab Emirates and China. The company grew by 18 per cent last year.

Dubai's Jebel Ali port is DP World's biggest operation, followed by Qingdao, of China, and Nhava-Sheva, of India.