DP World, one of the world's largest marine terminal operators, said its board plans to undertake a one-for-20 reverse stock split, in a bid to boost its share price, after seeking approval from its shareholders.

As per the proposal, each shareholder at the commencement of trading on May 19 will receive one new ordinary share of $2 for every 20 existing ordinary shares of $0.10 each. Trading in the new ordinary shares of $2 is expected to commence the same day.

DP World, one of the more profitable assets of debt-laden Dubai World which owns 80 per cent of the firm, said shareholders will vote on the matter on May 11.

The reverse stock split will reduce the number of shares to about 830 million from about 16.6 billion, said the global port operator. The free float will remain unchanged at 19.55 per cent, it added.

Commenting on the move, DP World said the board believes that this will better position DP World’s share price alongside global companies with an earnings per share ratio that better reflects the value of the company.

'It is anticipated that the share price on May 19 will be approximately 20 times the level of the previous night’s close to adjust for the reduction in the number of shares in issue, which will reduce from approximately 16.6 billion shares to approximately 830 million shares,' the statement said.

It is the Board’s intention that upon consolidation, fractional entitlements will be pooled and sold in the market with, where practicable, all proceeds being returned to shareholders in the same way dividends are distributed via NIN accounts, Nasdaq Dubai members, custodians and brokers.

The port operator in late March posted a 35 per cent increase in 2010 net profit and said it was on track to list on the London Stock Exchange later this year.-Reuters and TradeArabia News Service