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Tabreed to spend AED1bn buying back bonds

District cooling firm says replacing bonds with debt financing will save it around $8m a year

NEWS, Business

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.

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