Abu Dhabi Ports sees more debt sales for growth after first bond

Abu Dhabi Ports Co. plans to sell more debt to support investment after a debut bond of $1 billion on Wednesday.

The government-owned port operator in the capital of the United Arab Emirates will look at a mix of loans, bonds and sukuk as well as potential cash injections from its owner to fund growth, Chief Financial Officer Martin Aarup said in an interview. The company is planning $4.2 billion in investment over the next five years and could spend more on acquisitions, he added.

Demand for the bond, which was about 4.5 times oversubscribed, “reflects international confidence in the strength of our business and our strategy,” Abu Dhabi Ports Chairman Falah Mohamed Al Ahbabi said in a statement. The debut sale will also help the country push to diversify its economy and funding sources, he said.

The UAE, the third-biggest producer in the Organization of Petroleum Exporting Countries, has used its oil wealth to broaden its economy, diversifying into industries like tourism and developing global transport and trade hubs. Those businesses suffered last year as the coronavirus pandemic slashed energy use, cut air travel and blocked trade flows.

Volume handled by Abu Dhabi Ports, which is owned by government investment company ADQ, has largely returned to levels seen before the pandemic, said Ross Thompson, the port operator’s chief strategy officer. Visits by cruise lines and shipments of new cars are still below pre-pandemic levels and likely to remain subdued for a while longer, he said.

Abu Dhabi Ports boosted sales by 24% last year to $933 million. Adjusted earnings before interest, tax, depreciation and amortization rose 37% to $422 million.

The company aims to continue growing at double digit rates, Aarup said. It has no plans to sell shares to investors and can fund investment with cash flow, debt and additional equity from ADQ.