The proposed buyback of 28% of the mandatory convertible bonds held by Mubadala will save Tabreed over AED 30 million annually
National Central Cooling Company PJSC (‘Tabreed’), the Abu Dhabi–based regional district cooling utility company, today announced its intention to hold an Ordinary General Assembly (‘OGA’) to present to shareholders a proposal to buy back 28% of the mandatory convertible bonds (‘MCB’) currently held by Mubadala.
In the proposal, Tabreed will seek shareholders’ approval to buy back 854 million MCB at a cost of AED 1 billion. The MCB were issued to Mubadala as part of Tabreed’s 2011 recapitalization program.
The buyback will be financed through a new loan which Tabreed secured during its 2014 refinancing, and which has a lower cost of servicing than the MCB.
Jasim Husain Thabet, Chief Executive Officer of Tabreed, said: “Since the 2011 recapitalization 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 issued during the recapitalization. This replacement will result in a saving of over AED 30 million annually. Taken together with the debt refinancing completed at the end of 2014, combined savings will amount to over AED 40 million per year.
“In pursuing this proposal, Tabreed has applied the highest standards of corporate governance and best practices to protect shareholders’ rights.”
Tabreed has engaged HSBC to provide a fairness opinion to the Board of Directors of Tabreed which states that (as at the date of that opinion and subject to its terms) it is HSBC’s view that the proposed purchase price is fair from a financial point of view to Tabreed. Mubadala, as the bondholder, will abstain from voting at the OGA.
Shareholders will have the opportunity to discuss the buyback proposal with the company’s senior executive team and board members at the OGA, and then vote on whether to accept it or not.
The date and time of the OGA will be announced soon. For further details on this proposal, please visit the investor relations page on Tabreed’s website: