DP World - To divest or not to divest?

The Associated Press reports on a plan by Dubai Ports World to divest itself of the management of U.S. Seaports connected to its purchase of Peninsular & Oriental Steam Navigation Co.

A Dubai-owned company said Wednesday it plans to sell all its U.S. port operations within four to six months to an unrelated American buyer and laid out new details about how it plans to pursue the sale under pressure from Congress.

DP World said that until the sale is finalized, its U.S. businesses will be operated independently.

"An expedited sale process is under way and with the cooperation of the port authorities and joint venture partners, it is expected that a sale can be agreed within four to six months," the company said in a statement.

However, the story ignores completely the AP's own reporting that casts doubt on DP World's true intentions regarding the American ports. On Tuesday, as we noted here, the AP published a story by Ted Bridis about internal DP World e-mails indicating the company planned to retain management of at least one port, in Miami.

According to Bridis' piece, the e-mails went on to suggest that even if a sale of the Miami component did take place, it would a very long time to complete.

"As for the 'pending situation,' I myself am not aware of anything about it that would alter the ownership of POMTOC, so unless one or both of our esteemed partners have separately advised you that they plan to sell their interests, you should assume for your own purposes of managing the company that ownership of POMTOC is not going to change," [DP World executive Robert] Scavone wrote.

"And even if they do plan to sell, that would probably take a while," he wrote. Scavone's e-mail responded to an earlier message proposing a formal review of the port company's budget, "once the pending situation is resolved and ownership of POMTOC is established."

Scavone is executive vice president for security at P&O Ports North America Inc. and was among the company's executives who testified about the Dubai ports deal during congressional hearings this month.

Wednesday's AP story on the DP World divestiture plan makes no mention at all of the doubts raised by the internal e-mails. Interestingly, the Miami Herald, which carried the AP e-mail story on Tuesday, publishes its own piece today examining further the question of whether DP World really intends to divest itself of the American ports at all.