Tabreed to issue convertible bonds in recap plan

December 31, 2012 - 12:00:00 am

DUBAI: District cooling firm Tabreed  has agreed to issue Dh1.13bn ($308m) in convertible bonds to Abu Dhabi fund Mubadala on December 31, the firm said yesterday, as part of a recapitalisation plan agreed last year.

Tabreed secured Dh3.1bn of financing from Mubadala Development Co, wholly owned by the Abu Dhabi government, in March 2011; the package consisted of a Dh1.7bn convertible bond issue and a loan facility of up to Dh1.4bn. 

Under terms of the loan, which matures this month, the amount drawn by Tabreed would be repaid with an issue of new convertible bonds. 

Yesterday’s statement said Tabreed had drawn Dh1.13bn from the facility, and would issue that amount of convertible bonds to Mubadala under the same terms as its previous convertible issue.

The conversion price of the original bonds was Dh1.1259 a share; Mubadala can convert them into shares in 2019.

Formally known as National Cooling Company, Tabreed provides cooling systems to residential and commercial properties in the Gulf. It also cools Dubai’s metro network. 

The company reported a 35 percent rise in third-quarter net profit, helped by growth in its chilled water business and lower financing costs. Its shares have jumped 140 percent year-to-date. 

Tabreed is among a number of United Arab Emirates firms that has had to restructure its debt after the property market boom ended abruptly in 2009.