Dubai World unit sells UK asset to Brookfield, say sources

Economic Zones World (EZW), a unit of government-owned conglomerate Dubai World, has sold its British-based logistics firm Gazeley to Brookfield Asset Management, sources said on Tuesday.

It is the first major sale of a foreign asset by Dubai World as it restructures its debt. The sources, who are familiar with the deal but declined to be named because the matter is not public, did not reveal the price of the transaction.

EZW was not immediately available to comment. Toronto-based Brookfield could not be contacted immediately.

Gazeley is one of four businesses held by EZW, which operates technology, logistics and industrial parks as well as the Jebel Ali Free Zone (JAFZA), a business district, under the Dubai World Group umbrella.

Dubai World bought Gazeley from Walmart Stores in 2008 for an estimated 300 to 400 million pounds ($459-611m); because of falls in asset prices since then, the sale to Brookfield may have occurred at a lower price.

In Dubai World’s $25 billion debt restructuring deal with banks, signed in March 2011, the company said it planned to raise between $1.3 and $2.3bn through the disposal of some assets including Gazeley.

Since Dubai’s corporate debt crisis of 2009-2010, the emirate has sold assets more slowly than some bankers had hoped, raising questions about how it will repay debt maturities looming in the next three years.