Gov't investment vehicle Mubadala will offer bridge loan to cover recapitalisation.
Dubai-listed Tabreed will get a $354 million financial stimulus package from a sovereign shareholder after it unveiled a surprise loss for 2009 and said it needed to recapitalise,
sending shares plummeting
The Abu Dhabi state-controlled investment vehicle Mubadala, which owns a 16.7 percent stake in the company, also known as National Central Cooling, will offer bridge financing to cover its needs while it completes a recapitalisation programme expected to last most of 2010, the company said on Monday.
Tabreed, which provides cooling for big buildings, posted a surprise a AED1.12 billion ($305 million) loss for 2009 due to a non-cash impairment charge, making it the latest Gulf firm to suffer from the real estate market crash.
"The AED1.3 billion loan is sufficient to take us through the recapitalisation process," its chief financial officer Steve Ridlington told Reuters in an interview.
"The funding from Mubadala will enable us to pay our bills through most of this year during the recapitalization phase," he added.
Shares in the firm fell 9.5 percent, near the maximum 10 percent allowed, as investors registered their discontent.
Tabreed is in discussions with strategic investors to provide long-term capital to support the business, the firm said in a statement. Options for new capital include a private placement and, or public offering.
Ridlington declined to give further details.
By mid-April, the board intends to call for an extraordinary assembly for shareholders to vote on resolutions to conclude the recapitalisation, the statement said.
The Middle East's largest district cooling firm made a net profit attributable to shareholders of AED23.98 million in the fourth quarter of 2008 and a full year 2008 net profit of AED73 million. (Reuters)