Dubai: The world’s third biggest container terminal operator, DP World, aims to raise as much as $3.5 billion (Rs13,825 crore) in a share sale that may begin next month, said two people with knowledge of the plan.

Dubai-owned DP World plans to sell as much as 30% of its shares to the public to help fund expansion, according to the people, who declined to be identified because the proposal is private.

The sale needs the approval of Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum, they said. The shares will be listed on the Dubai International Financial Exchange (DIFX) and may also be offered on the London Stock Exchange, the people said.

An initial public offering (IPO) is one of the options “on the table," DP World chairman Sultan bin Sulayem said on Wednesday, declining to be more specific about the sale.

State-owned DIFX will be re-branded as a Nasdaq Stock Market Inc. venture under an agreement reached with the US exchange by DIFX parent Borse Dubai last month.

Using options: Sultan bin Sulayem, chairman, DP World.

The company has said it aims to double handling capacity to 84 million 20-ft container units a year by 2016 to catch up with bigger rivals Hutchison Port Holdings Ltd and PSA International Pte.

The firm was forced to agree to sell US assets acquired from P&O after pressure from US lawmakers who cited security concerns. It intends to buy or expand port facilities in China and India as trade booms in the world’s two fastest growing economies, bin Sulayem had said in July.

India connection

DP World is the largest private container operator in India with presence in six ports.

It operates private container trains and is planning to invest heavily in port-specific special economic zones (SEZs) in Chennai, Bangalore, New Delhi, West Bengal and Mumbai.

The acquisition of P&O has given DP World direct control of container cargo operations at Nhava Sheva International Container Terminal at Jawaharlal Nehru Port in Mumbai, Chennai Container Terminal Ltd, Mundra International Container Terminal in Gujarat and Kulpi port in West Bengal.

The company already has the mandate to construct an international container transshipment hub at Vallarpadam island in Kochi. The group will invest more than Rs2,000 crore on Kochi port to create a facility that will enable bigger ships to visit that port for direct services rather than carrying cargo to ports in Singapore, Dubai and Colombo.

The firm is currently running a container terminal at Visakhapatnam port through a joint venture with United Liner Agencies, promoted by Mumbai-based JM Baxi Pvt. Ltd.

DP World’s senior vice-president & managing director (Indian subcontinent) Ganesh Raj had earlier told Mint that the group is keen on investing in rail connectivity projects, warehouses, inland container depots and container freight stations other than port-related SEZs.

Good reception

DP World’s IPO “should get a good reception," Shailesh Garg, a ports analyst for London-based consulting company Drewry Shipping said in Mumbai on Wednesday. “There are lots of opportunities for growth in China and India particularly, so it would be a good time to raise extra finance for that."

DP World is worth about $10 billion, Drewry Shipping estimated after the P&O acquisition last year. A sale of 30% of its shares to raise $3.5 billion would value the company at $10.5 billion.

Deutsche Bank AG, Merrill Lynch & Co., Shuaa Capital Psc., and Dubai Islamic Bank Pjsc. are advising DP World on its IPO, chief financial officer Yuvraj Narayan had said last year. The ports company is “committed" to an IPO by January 2008 after selling convertible bonds, he said. Sharaf declined to comment and Narayan couldn’t be reached for comment.

P.R. Sanjai of Mint contributed to this story from Mumbai