Mubadala says to sell stake in UAE's Tabreed to Engie

UAE fund will retain 42% shareholding in cooling firm under the deal with French energy giant

Abu Dhabi sovereign wealth fund Mubadala Investment Company has agreed to sell a 40 percent stake in National Central Cooling Company (Tabreed) to energy firm Engie, it announced on Monday.

Mubadala will remain the single largest shareholder of Dubai Financial Market (DFM)-listed Tabreed under the deal.

It currently owns approximately 82 percent of Tabreed (on a fully diluted basis, through a combination of equity and mandatory convertible bonds, or MCBs).

Under the transaction, Mubadala is to convert all its MCBs into shares, with 1,086,211,654 shares (equivalent to a 40 percent shareholding) transferred to ENGIE at a price of approximately AED2.62 per share.

Mubadala will retain 1,136,507,713 million shares, taking its total shareholding in Tabreed to approximately 42 percent.

The deal is is subject to regulatory approval in the UAE and completion is expected to occur in the third quarter of 2017, Mubadala said in a statement.

Mubadala and Engie have also agreed certain cooperation arrangements that are designed to support Tabreed’s growth strategy and management team, as long-term shareholders in the company.

ENGIE a global player in energy-efficient cooling networks, which operates more than 250 low-carbon urban heating and cooling networks in 13 countries, including some of the most renowned European district cooling systems such as the London Olympic Park, in the European cities of Paris, Marseille, Barcelona, Lisbon, and worldwide in the city of Cyberjaya in Malaysia.

Through the partnership with Mubadala, UAE firm Tabreed will become one of ENGIE’s main regional development platforms, besides existing operations in Western Europe, North America and South-East Asia.

ENGIE expects to lead a rapid growth, through Tabreed, in new emerging markets like India, Egypt and Turkey, Mubadala said in a statement.

Homaid Al Shimmari, deputy group CEO of Mubadala, said: “Tabreed is a company with a strong growth trajectory, and will benefit from ENGIE’s experience as an operator of world-class utility businesses.

“Mubadala has been, and will continue to be, a significant, long-standing shareholder in Tabreed – a well-capitalised company delivering consistent and sustainable returns to investors, with a strong and growing customer base.”

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