New Tabreed shares trade after capital reduction

Tabreed is aiming to restructure around AED 3.7 billion in debts.

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National Central Cooling Company, also known as Tabreed, will see new shares trade on the Dubai index after gaining clearance last week to cancel almost 1 billion shares by combining stock.

The cancellation of 970 million shares will be at a ratio of 5:1 – in effect a reverse share-split – whereby shareholders will retain one share for every five original shares it holds, with the remaining shares will be cancelled.

Tabreed - worth about AED 2.5 billion - constructs, installs and operates cooling and conditioning systems, with a separate business selling chilled water for use in district cooling technologies. It is attempting to restructure around AED 3.7 billion in debts and raise the company’s share price to more than AED1 per share – the threshold required before raising more equity capital. The Dubai-listed stock closed at 41 fils on Thursday.

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The percentage share of Tabreed held by each shareholder will be the same as before, subject only to minor adjustments as fractional shares will not been issued.

The cancellation of shares through a capital reduction is a key component of Tabreed’s recapitalisation program that was approved by shareholders at the Company’s EGA on in May.

In September Aldar Properties, Abu Dhabi’s biggest developer, said it would consider acquisitions or joint ventures with cooling companies as an alternative to Tabreed, up to now its sole provider.