Tabreed to spend AED1bn buying back bonds
District cooling firm says replacing bonds with debt financing will save it around $8m a year
District cooling firm Tabreed has announced plans to spend around $272m (AED1bn) buying back convertible bonds held by Abu Dhabi investment fund Mubadala.
The firm said that it would buy back around 28% of the mandatory convertible bonds (MCB) held by Mubadala and estimates that the move will save the company around $8m (AED30m) a year.
The bonds were issued as part of a recapitalisation programme undertaken by Tabreed in 2011. The firm said it plans to pay for the bonds by taking out a new loan, which will cost less to repay.
CEO Jasim Husain Thabet said: “Since the 2011 recapitalisation program, Tabreed has strengthened its operational and financial performance significantly which has yielded substantial improvements to our credit profile. As a result, we are now in a position to access attractive debt financing to replace bonds.
"Taken together with the debt refinancing completed at the end of 2014, combined savings will amount to over AED40m ($10.9m) per year.