Tabreed eyes $1bn bond issue in next 12 months

Tenure of the bond could be up to 30 yrs

DUBAI: With eyes set on ambitious expansion plans in the GCC region, especially in Kuwait, and other fast-growing markets such as Egypt and India, the National Central Cooling Company (Tabreed) is considering raising of up to $1 billion (AED3.67 billion) through the issue of conventional bonds or sukuks during the next one year.

A shareholders’ general meeting of the company to be convened soon is expected to authorise the board of directors to work on the modalities of the fund raising plan with a timeframe of 12 months from now.

As per the initial plans, the issue of bonds and/or sukuk will be either directly or through a special purpose vehicle (SPV) and could be done in one or more tranches by offering to qualified investors with a total value of up to $1 billion in aggregate and with a tenure of up to 30 years.

“The issue of the securities is undertaken within one year of the date of the passing of the resolution (and any renewal of such authorisation at forthcoming general assemblies), and in compliance with the provisions of the Federal Law No (2) of 2015 concerning the Commercial Companies,” the company statement added.

Tabreed that reported net profit of AED224.30 million for the first half ending June 30, 2020 witnessed a substantial surge in its interest bearing loans and borrowings from AED1.018 billion to AED3.727 billion during the said period.

Out of this, $250 million (AED917.5 million) is repayable in 10 fixed semi-annual instalments commencing with a bullet payment of 30 per cent on December 31, 2023.

Another AED590 million, which is yet to be fully drawn, is repayable on December 31, 2023, according to the half yearly company financials released recently.

Khaled Abdulla Al Qubaisi, Tabreed’s chairman noted that the company’s ongoing growth reflects its commitment to meet the region’s growing demand for energy-efficient and environmentally-friendly cooling solutions.

Tabreed continued to add to its portfolio of landmark projects with the acquisition of its Downtown Dubai district cooling business during the second quarter of 2020 in a historic partnership with Emaar Properties.

The company that operates about 75 plants across five GCC countries, including projects in the UAE, Bahrain, Oman, Qatar and Saudi Arabia, is looking to expand in existing markets like Saudi and Egypt, according to a recent media report.

 

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