Tabreed to issue Dh1.13bn convertible bonds to Mubadala

Tabreed has agreed to issue Dh1.13 billion in convertible bonds to Mubadala Development as part of a recapitalisation plan agreed last year.

Tabreed will issue convertible bonds worth Dh1.13 billion to Mubadala, a strategic company owned by the Abu Dhabi Government, as part of a recapitalisation plan agreed last year.

Mubadala offered the district cooling company a loan facility of Dh1.4bn maturing at the end of this month and a convertible bond worth Dh1.7bn.

The combined value amounts to Dh3.1bn.

Tabreed has drawn Dh1.13bn from the loan facility, it said in a statement yesterday posted on the Dubai bourse.

The loan facility will be closed and converted to convertible bonds, with the same terms as the previous issue, the statement added.

Like other district cooling operators, Tabreed was buffeted by the property downturn that started in late 2008. It spent billions of dirhams building air conditioning plants, but revenues slowed as projects were delayed and scaled back.

Empower, a district cooling company owned by the Dubai Electricity and Water Authority, also underwent a debt restructuring in the wake of the crisis.

Mubadala has played a significant part in helping to revive the fortunes of Tabreed after it became mired in debt during the global downturn.

Tabreed shares gained 0.8 per cent at Dh1.21 each yesterday. They have risen 140 per cent since January, compared with about 20 per cent for the Dubai Financial Market General Index as a whole. Tabreed has posted a third-quarter profit of Dh73 million, a 35 per cent increase from last year's Dh54.1m.

"The new board and the entry of Mubadala has led to a full restructuring of the company, the results of which have been positive and reflected on the financial statements of the company," said Wadah Al Taha, the chief investment officer at Al Zarooni Group, an investment company in Dubai.