Tabreed seeks to buy back bonds from Mubadala

Abu Dhabi-based National Central Cooling Company PJSC (Tabreed), a cooling utility company, recently announced it would conduct an ordinary general assembly to explain to shareholders the company's proposal to buy back 28 percent of the mandatory convertible bonds (MCB) that are presently held by Mubadala.

The bonds were issued to Mubadala in 2011 during Tabreed's recapitalization program. The purchase will be funded through a loan secured by Tabreed that carries lower service costs than the MCB.

“Since the 2011 recapitalization program, Tabreed has strengthened its operational and financial performance significantly which has yielded substantial improvements to our credit profile," Tabreed Chief Executive Officer Jasim Husain Thabet said. "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 ($8.1 million) annually. Taken together with the debt refinancing completed at the end of 2014, combined savings will amount to over $40 million per year."

HSBC was retained by Tabreed’s board of directors to look over the proposal, and the external experts said from a financial standpoint the proposal was solid.

“In pursuing this proposal, Tabreed has applied the highest standards of corporate governance and best practices to protect shareholders’ rights,” Thabet said.

Mubadala, as the bondholder, will abstain from voting at the OGA. Before a vote is taken, shareholders will be able to talk about the proposal with Tabreed's senior executive team and board members.

The date and time of the assembly will be announced soon. For more information, visit