Quebec's Caisse de depot weighs increasing its stake in key Dubai assets

financialpost.com:

Caisse de depot et placement du Quebec (CDPQ) is considering investing billions of dollars to increase its holdings in some of Dubai’s most prized shipping and logistic assets, people with knowledge of the matter said.

The Quebec pension fund is in talks to boost its stakes in the Middle East’s biggest port, Jebel Ali Port, the Jebel Ali Free Zone and National Industries Park industrial zones, the people said. All are controlled by state-owned DP World.

The caisse, which manages some public pension funds and insurance plans independently from the government, is in talks with banks to raise financing for the deal, according to the people. Discussions are ongoing and no final decisions about how much to invest have been made, they said, asking not to be identified discussing confidential information.

Representatives for CDPQ and DP World declined to comment.

A deal would follow a multi-billion investment by CDPQ in Jebel Ali Port, Jebel Ali Free Zone and National Industries Park in June 2022. That transaction valued the assets at about Us$23 billion including debt and helped DP World improve its balance sheet by cutting leverage. 

Dubai is the Middle East’s business and finance centre. In recent years, it’s been deepening trade routes and working to attract global firms as it faces growing regional competition. Almost 80 per cent of the city’s trade volume is handled through Jebel Ali Port, the 12th largest in the world, according to the Dubai Trade website.

DP World has been exploring the sale of equity stakes in certain assets as the emirate works to reduce the debt pile that helped finance the city’s growth. Dubai took DP World private in early 2020 to help the company better manage its borrowings.

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