Dubai puts air conditioning on the block in rare government asset sale

Dubai is seeking a buyer for the cooling system operations of its biggest airport as Gulf Arab states lean on asset sales and debt to shore up their finances. The government entity overseeing the main airport’s infrastructure has hired Standard Chartered as adviser on the transaction, with the entire business valued at around $750m, according to people familiar with the matter, who asked not to be identified because details are private. As part of the deal, investors obtain a long-term lease to operate the assets, they said, offering steady returns for the duration of the contract. The company is looking to offer a controlling stake and is approaching local and international district cooling specialists, as well as global infrastructure players, the people said. Talks are at an early stage and there is no guarantee a deal will be reached. A deal would generate much-needed revenue for Dubai. Similar to other governments in the Gulf, the emirate is trying to contain the damage caused by the coronavirus pandemic amid a broader economic downturn linked to low oil prices. It’s already joined a regional debt binge in recent months, with the emirate tapping public markets for the first time in six years and its sovereign wealth fund also issuing bonds. Selling state assets is more rare, with the latest deal done in 2019, when Dubai-owned Meraas Holding agreed to let Brookfield Asset Management own and operate some of it’s retail holdings. A potential sale would also allow the airports owner to hand over the handling of the mammoth district cooling operations to more specialized and cost-efficient operators. With a surface of over 2 million square meters, Dubai’s international airport is one of the world’s largest and busiest travel hubs. It is the home of Emirates airline.<br/>