Things are finally cooling down for Abu Dhabi cooling firm Tabreed, as it reaches the final stages of its debt restructuring plan.
March 4, 2011 12:01 by Eva Fernandes
Kipp has been cursing the weather a lot these past few days. Apart from the fact that it has been getting hotter and hotter (marking the end of the rather short winter we know and love in the UAE), it has been getting more humid, helping Kipp’s hair resemble a creation from a Tim Burton film (Kipp is as concerned about its hair as the next androgynous website, you know). But lo and behold! While we were avoiding work this afternoon and walking aimlessly about Media City, we were overwhelmed with a shiver and goose bumps because of an unexpected gust of wind. Yes, folks, for a day at least it’s cooling down again.
And it would seem we aren’t the only ones who are enjoying a cool down; so too is cooling firm Tabreed, which is in the final stages of its debt restructuring plan. Yep, it’s a great financial cool down [leave it now – Ed]. Ok, Kipp has got the awful ‘cooling’ analogy out of our system and now will get to the main story.
National Central Cooling Company, or Tabreed, was established in 1998 and is, to quote its website “an Abu Dhabi based utility company that provides year-round climate control to communities across the Middle East.”
Currently Tabreed owns and operates 33 district cooling plants, and operates 29 plants via wholly-owned joint-ventures and subsidiaries (also from their website). Tabreed has operations in Kuwait, Oman, Qatar, Saudi Arabia and the UAE. Some of the projects Tabreed has completed or been involved in include Marina Mall, Zayed Sports City, Yas Island and Shams Abu Dhabi.
As the property boom really took off in the UAE in the early 2000s, the construction sector benefitted of course but so did cooling companies – just like Tabreed. So when the property market crashed in late 2008, Tabreed execs started getting nervous as projects were put on an indefinite pause, some were pushed back and others cancelled. Therefore Tabreed’s massive billion dirham debt perhaps wasn’t as big a shock as other companies at the time, but it certainly was massive enough. Since then it has been working on a deal with its creditors to refinance the Dh5 billion dirhams it owes and just this week it seems to be closer to a deal.
The final stages of its debt restructuring plan see Tabreed proposing to issue Dh1.7 billion of convertible notes. Mubadala, which owns almost a 17 percent stake in Tabreed, is to provide up to Dh3.1bn in new long-term capital commitments: which include Dh1.7 billion of subordinated mandatory convertible notes which mature in 2019. As the last bits and bobs of the restructuring plan finally settle into place, it looks like Tabreed’s shareholders will finally be able to cool down a bit – that is if the weather hasn’t already done it for them.