Dubai weighs $1b shipping fund

Maritime City Authority examining ways to provide investment support to local firms

Dubai is looking into creating a $1 billion (Dh3.67 billion) investment fund focused on shipping to develop the city’s maritime sector and ride out a global industry downturn, three finance sources familiar with the plans say.

The sources said the Dubai Maritime City Authority, the government entity responsible for developing the maritime industry in the emirate, was examining ways to establish a fund to provide financial investment support to Dubai-based firms.

“There is interest in this idea [from Dubai]. At this stage it is fact-finding,” one source said.

The Dubai Maritime City Authority was not immediately available to comment.

A second source said there had been initial discussions, adding that a tender could be issued by the authority in the coming months to hire an adviser.

The sources said the funds would not replace financing from banks, but could be used to help companies buy ships or stage transactions such as initial public offerings and mergers.

The second source said the fund could either be financed by private investors or stateowned banks, or both, with the loans it provided likely to be guaranteed by the government.

The sources said if the fund were established quickly, it could be used to support a bid to acquire United Arab Chemical Carriers, a shipping firm with an estimated value of $200 million, whose biggest shareholder, Dubai-run United Arab Shipping Company, is trying to sell it as part of conditions for a merger with German container line Hapag Lloyd.

The UAE’s shipping fleet is estimated to be valued at $9.9 billion and ranked in 17th place, according to ship valuation company VesselsValue.