Tabreed secures US$844m capital from Mubadala

The company's core business saw high profits last year.

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National Central Cooling Company , also known as Tabreed, said it has secured AED 3.1 billion in long-term capital from Mubadala Development Company as the company’s expansion plans continue.

Under the agreement, Mubadala - a state-backed investment vehicle - will provide AED 1.7 billion in eight-year subordinated notes that will refinance the company’s bridge finance, along with an AED 1.4 billion convertible loan facility. This two-year facility will allow the company to meet its liquidity needs or pursue growth opportunities, Tabreed said in a statement.

The company may repurchase a portion of the subordinated notes in the future, which will be transferable to shareholders and other investors interested in participating in the new instruments.

The deal follows the AED 400 million in short-term loans extended to Tabreed by Mubadala, which last December bought convertible bonds in Aldar, the property developer.

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“Tabreed has reached an AED 2.63 billion refinancing agreement with its banks and secured up to AED 3.1 billion in long-term capital commitments from its strategic investor,” said Khadem Al Qubaisi, chairman.

“This program provides the foundation for future growth and we look forward to closing this program by 31st March ... By delivering value and dependability to our institutional clients, Tabreed will meet future demand for cooling infrastructure in the region.”

Dubai-listed Tabreed owns and operates 49 district cooling plants, and via whollyowned joint-ventures and subsidiaries has operations across the GCC.

Last month the company revealed net profits for 2010 that were 174% higher than the previous year - AED1.02billion against AED783million, with a 53% rise in gross profits, up to AED426million against AED278.1million.

Sujit S. Parhar, CEO, said the results were a “turnaround” for the company over the year and was due to a refocus on its core chilled water business, which produced AED753.3million of the revenue, up 73% against 2009. The company’s manufacturing and contracting segments posted losses in revenue.

Tabreed shares closed up 0.028% to 99 fils yesterday.