In brief
- On 9 July 2016, Horn Diplomat reported DP World raised USD 1.2 billion via a 7-year sukuk and agreed to develop the Port of Berbera.
- The Berbera project was valued at USD 442 million, phased over time and dependent on port volumes, with a joint venture company to be set up.
- The 2016 report does not establish whether the joint venture was formed, construction began, or the project's current status.
Horn Diplomat reported on 9 July 2016 that Dubai-headquartered port and terminal operator DP World had raised USD 1.2 billion in a new 7-year sukuk and, separately, agreed to develop the multi-purpose Port of Berbera in Somaliland. The report, sourced from Worldmaritimenews, carried the headline "Somaliland:DP World Raises USD 1.2 Bn, Agrees to Develop Berbera Port."
The sukuk, set to be listed on NASDAQ Dubai, was priced at a fixed coupon rate of 3.91% maturing in 2023. DP World said the issue was 2x oversubscribed, receiving more than USD 2 billion in bids. The new sukuk followed the refinancing of over USD 1.1 billion of the existing USD 1.5 billion 2017 sukuk, replacing that higher-coupon instrument (6.25%) and keeping a dual listing on the London Stock Exchange. The remaining USD 387 million of the 2017 sukuk was due to mature the following year, according to Horn Diplomat. Proceeds from the new sukuk would fund the tender offer and general corporate purposes.
On the Berbera agreement, Horn Diplomat reported that DP World said it had signed an agreement earlier in July 2016 to invest in the port. DP World stated that a joint venture company would be set up to invest in and manage the port. The project was valued at USD 442 million. According to Horn Diplomat, DP World announced that the project would be phased over time and dependent on volumes generated at the port. Horn Diplomat also reported that DP World announced it would involve setting up a free zone to support development of Berbera's trade corridors.
Sultan Ahmed bin Sulayem, DP World Group Chairman and CEO, was quoted by Horn Diplomat as saying: "Investment in this natural deep water port will attract more shipping lines to East Africa and its modernisation will act as a catalyst for the growth of the country and the region’s economy."
The 2016 report does not establish what has happened since. It does not state whether the joint venture company was formed, whether construction has begun, or whether the USD 442 million has been spent. It also does not name the counterparty to the Berbera agreement beyond a general reference to investing in the port. The sukuk's listing on NASDAQ Dubai was reported as "set to be listed," not confirmed as listed. No subsequent updates from Horn Diplomat or other sources are provided in the available evidence.