L’Imad maps port expansion beyond Strait of Hormuz

Abu Dhabi sovereign investor L’Imad Holding is positioning AD Ports Group for tighter state control as the emirate strengthens trade routes outside the Strait of Hormuz, with its takeover of the ports operator moving towards settlement after attracting acceptances that will lift its holding above 98.5 per cent.

The transaction, conducted through L’Imad’s wholly owned subsidiary ADQ, values AD Ports at Dh31.8 billion. ADQ offered Dh6.25 a share for stock it did not already own, a 23 per cent premium to the company’s August 14 closing price. The tender closed on September 15, and settlement is due no later than October 9.

ADQ held 75.42 per cent before the offer. Shareholders tendered about 23.08 per cent of AD Ports’ issued capital, leaving only a small minority outside the sovereign investor’s control. ADQ said on September 22 that all conditions of the voluntary conditional cash offer had been satisfied, clearing the transaction for settlement.

The consolidation comes as Abu Dhabi accelerates efforts to reduce its exposure to disruption at Hormuz, whose restricted shipping since the Iran conflict began has forced Gulf governments and companies to rework supply chains. AD Ports has already redirected cargo through Fujairah Terminals and Khor Fakkan Port on the Gulf of Oman and established bonded land corridors linking those gateways with Abu Dhabi.

The company has also expanded feeder shipping, trucking, rail, air cargo and warehousing capacity to keep goods moving. Its alternative network connects with India, Pakistan and Oman, alongside Red Sea and Gulf destinations, demonstrating how assets across L’Imad’s portfolio can be combined when established maritime routes are disrupted.

Further port investment outside Hormuz is under consideration as L’Imad evaluates infrastructure capable of giving Abu Dhabi more resilient access to international markets, according to people familiar with the plans. The scale, timing and locations of any additional projects have not been publicly confirmed by L’Imad, making estimates that spending could run into tens of billions of dollars prospective rather than committed expenditure.

The strategic pressure is visible in the UAE’s wider logistics policy. Foreign Trade Minister Thani Al Zeyoudi said this month that alternatives developed during the Hormuz disruption were becoming permanent, pointing to eastern ports and logistics corridors through Oman. The government has rejected attempts by any single state to control passage or impose tolls through the waterway.

AD Ports’ operating performance has underlined both the cost of the disruption and the value of diversification. Second-quarter net profit attributable to owners rose 86 per cent year on year to Dh596.7 million, while group revenue increased strongly. Its core UAE port operations, however, faced sharp volume declines as normal Gulf shipping was curtailed, making alternative maritime and overland connections more important.

L’Imad has rapidly become one of Abu Dhabi’s principal sovereign investment platforms. The Supreme Council for Financial and Economic Affairs decided in January to consolidate L’Imad and ADQ’s assets and investments under the L’Imad umbrella. Market estimates put the enlarged platform’s assets at about $300 billion.

Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, chairs L’Imad. Its board was constituted in January, with Jassem Mohamed Bu Ataba Al Zaabi serving as managing director and chief executive. Sheikh Khaled approved the fund’s investment and operational framework in July, covering energy and utilities, urban development, ports and logistics, aviation, industrial activities and alternative investments.

That structure places AD Ports alongside other transport assets including Etihad Rail and logistics company Aramex, giving the sovereign investor scope to coordinate sea, land and logistics infrastructure. L’Imad has also joined Global Infrastructure Partners, Temasek and Adnoc in a programme targeting $30 billion of infrastructure investment across the Gulf and Central Asia.