Emicool signs Dh669m loan deal

Left to right in front row, Simon Azzam, CEO of Union Properties; Abdul Aziz Al Serkal, Chairman of Emicool; Anis Al Jallaf, Chairman of Dubai Investments; Khalid J Kalban, MD and CEO of Dubai Investments; and Mubashar H Khokhar, CEO of Badr Al Islami

Emirates District Cooling Company (Emicool), a joint venture between Union Properties and M'Sharie, the private equity arm of Dubai Investments, signed a syndicated Islamic finance facility of Dh669 million with seven banks to fund the first phase of its Dh2.5 billion expansion programme.

The facility was arranged by Badr Al Islami, Emirates Islamic Bank and Standard Chartered Bank as Initial Joint Mandated Lead Arrangers and the Commercial Bank of Dubai, Dubai Islamic Bank, Emirates NBD and Union National Bank acted as Joint Mandated Lead Arrangers in the syndicate facility.

"This syndication opens up new strategic avenues for Emicool, and will help to set the company on a sustainable high growth trajectory," said Abdul Aziz Yaqoob Al Serkal, Managing Director of M'Sharie and Chairman of Emicol. "We view the enthusiastic response from the banking community as further proof of Emicool's distinguished market reputation and excellent growth potential," he said.

The loan is repayable in one bullet payment within three years, from the proceeds of a future Islamic Finance Facility or a sukuk issue. Al Serkal said: "Emicool has drawn up ambitious plans for the future, and continued expansion of production capacity forms the centrepiece of our business strategy. As the demand for district cooling is on the rise across the UAE and Middle East, it has become imperative for Emicool to optimise production capacity and further enhance its technological capabilities to meet growing market requirements more efficiently."

The financing proceeds will be used to fund Emicool's projects at Dubai Motor City and Dubai Investments Park. The company estimated that its expansion plans would require an investment of about Dh2.5bn over the next five years. In this regard, Emicool expects to raise twice the amount of the current syndication in the future to refinance the existing facility and meet future requirements".

Badr Al Islami and Mashreqbank is the Structuring Advisor and the Investment Agent for this Syndicated Islamic Finance Facility. Moinuddin Malim, Corporate and Investment Banking Head at Badr Al Islami, said: "Emicool has been able to raise funding from a syndicate of banks who understand the district cooling business and have accordingly priced the transaction. Badr has co-ordinated this agreement for Emicool and is pleased to see banks working together to jointly close this deal".

Hassan Jarrar, Country Head of Origination and Client Coverage at Standard Chartered Bank, said: "Standard Chartered Saadiq is honoured to be associated with this debut Islamic fund-raising for Emicool.

"This further underscores our award-winning track-record and leadership in Islamic project financing."