Tabreed shareholders to ratify $1 bn bond issue on Oct 6  

ABU DHBAI/September 20: Tabreed said its shareholders would ratify at its general assembly meeting on October 6 the move to authorise the board of directors the plan to raise $1 billion through issue of conventional bonds or sukuks during the one year period since the authorisation by shareholders.

The company about 10 days ago had raised $692 million through a syndicated deal, which was pre-funded by HSBC Bank Middle East in March 2020, as part of the company’s acquisition funding of 80 per cent stake in Emaar Properties’ Downtown Dubai district cooling business

Despite the downturn in general business sentiments due to the COVID 19, Tabreed is going ahead with its geographical expansion plans within the region and beyond.

The company has set its eyes on ambitious expansion plans in the GCC region, especially in Kuwait, and other fast-growing markets such as Egypt and India.

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 had said.

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 six-month period ending June 30.

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.

Commenting on the successful syndication of $692 million, Bader Al Lamki, Chief Executive Officer at Tabreed, had said the successful syndication of this loan facility underscored Tabreed’s strong business fundamentals, the solid relationships with its key partnering banks and the confidence the financial markets have in the company’s expansion projects, both in Dubai and across the region.

 

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