Tabreed gets Mubadala lifeline

UAE's Tabreed secured an additional Dh3.1 billion ($844.2 million) lifeline from state-owned fund Mubadala, as the struggling cooling firm strives to tackle its massive debt pile.

Tabreed will issue Dh1.7 billion ($463 million) of subordinated mandatory convertible notes to refinance the firm's existing bridge loan with Mubadala of the same amount. The firm will also get a Dh1.4 billion loan facility.

Chief Financial Officer Stephen Ridlington said in a conference call that it was not clear how much of loan amount would be used by Tabreed.

"Ultimate amount of funding we will require is uncertain," said Ridlington, adding that the company has more than sufficient funds to meet requirements until the end of 2012.

"This is new money coming into the Tabreed provided by Mubadala to refinance a short-term senior debt from Mubadala," Ridlington told Reuters.

Ridlington said the Islamic bond is mandatory convertible into shares and will be repaid through issuing shares.

Tabreed, also known as the National Cooling Co, is among a number of Gulf companies restructuring debt after an economic boom ended abruptly and caused a property market crash.

The indebted company also said it has reached an agreement with banks on the refinancing of its Dh2.63 billion debt.

"It's an 8-year facility, in tranches, but a single facility with an eyeball margin of around 2 per cent," said Ridlington.

The company expects to close the recapitalisation programme by March 31.

Mubadala, fully owned by the oil-rich Abu Dhabi government, has stakes in Advanced Micro Devices and Ferrari, as well as General Electric and private equity firm Carlyle. It bailed out Abu Dhabi developer Aldar Properties in January with a $5.2 billion support.

Islamic bond

Dubai-listed Tabreed has a Dh1.7 billion convertible Islamic bond due in May. The firm has asked holders of the bond to tender certificates for repurchase.

The executive said the Islamic bond is mandatorily convertible into shares and will be repaid through issuing shares.

Tabreed, also known as the National Cooling Co, is among a number of Gulf companies restructuring debt after an economic boom ended abruptly and caused a property market crash.

The company said it had no plans of tapping the market soon.

Ridlington added that the company is very focused on cost management but has no plans of staff cuts or changes in the management.

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