DP World Has No Plans to Sell U.S. Subsidiary

The Dubai-owned company that promised to surrender its U.S. port operations has no immediate plans to sell its U.S. subsidiary's interests at Miami's seaport, a senior executive wrote Monday in a private e-mail to business associates.

Even if Dubai Ports World were to sell its Miami operations to quell the congressional furor over an Arab-owned company managing major U.S. ports, "that would probably take a while," wrote Robert Scavone, a vice president for DP World's U.S. subsidiary.

The e-mail, obtained by The Associated Press, added to questions raised since DP World's announcement last week that it will divest U.S. port operations it acquired when it bought London-based Peninsular and Oriental Steam Navigation Co.

DP World has said those operations are worth roughly $700 million.

The takeover touched off a political uproar over the Bush administration's earlier approval of the deal without an intensive 45-day security investigation. The company initially sought to quiet the dispute by submitting voluntarily to such an investigation.

Last week, DP World backed away from the deal further. It pledged to "transfer fully" its U.S. operations to an unspecified American company and said DP World will not suffer economic loss.

The company has steadfastly declined to clarify its statement or the timing of any possible sale, and leading congressional critics have threatened to intervene if DP World's plans fall short of a full divestiture of its U.S. operations.

Scavone told AP in an interview that his e-mail was intended to reassure officials at the Port of Miami Terminal Operating Co. -- which manages operations there and is half-owned by a DP World subsidiary -- that uncertainty surrounding the Dubai ports deal would not affect its work in Miami.

"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," 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.

Scavone told the AP that under U.S. corporate laws, P&O's ownership in the Miami port company would not change even under DP World's planned divestiture.

"Just because a shareholder owns the top company of an elaborate network of corporations worldwide, it does not mean that what those corporations own changes hands," Scavone said.

Peninsular and Oriental handles significant operations at ports in New Jersey, New York, Baltimore, New Orleans, Miami and Philadelphia -- plus lesser dockside activities at 16 other ports in this country.

Scavone declined to confirm or deny he sent the e-mail, but he contacted a reporter less than one hour after AP's inquiry to explain the message's meaning. Another P&O executive, Frank Fogarty, said he received Scavone's e-mail and did not doubt Scavone sent it.

Fogarty, the company's senior vice president for marketing, said Scavone intended to tell Miami officials that, "as far as they should be concerned, they should just assume they're working for the same company they always have."

DP World previously agreed it will not control or manage any U.S. port operations it acquired until May 1 or until the outcome of the unusual, broader security investigation into the ports deal by the Bush administration.

"We don't know the outcome of this," Fogarty said. "DP World owns us, but we're operating without any control or direction from DP World. Until we hear otherwise or until they dispose of us -- however they wish to do that -- that's the way it's going to remain."

P&O Ports North America is the U.S. subsidiary of London-based Peninsular & Oriental, which DP World purchased for $6.8 billion. The sale of the British firm was finalized last week.

The Miami port company is half-owned by P&O Ports Florida, a subsidiary of P&O Ports Gulf Port, which itself is a subsidiary of P&O Ports North America. The Miami port company's other owners are Eller & Company Inc. and Florida Stevedoring Inc.