Font Size

- Aa +

Mon 25 Feb 2013 12:03 PM

Font Size

- Aa +

UAE's Tabreed to issue bonds to Mubadala as dividend

District cooling firm will issue bonds to key shareholder as part of first dividend since 2007

UAE's Tabreed to issue bonds to Mubadala as dividend

District cooling firm Tabreed said on Monday that it plans to issue more convertible bonds to its key shareholder Mubadala as part of its first dividend payment since 2007.

The Dubai-listed company has proposed to pay a cash dividend of 5 fils per share to its shareholders, it said in a bourse filing.

The utility firm, which received funds from Mubadala to restructure its debt, will pay dividends to the state-owned fund in the form of equivalent non-coupon bearing mandatory convertible bonds that can be converted to Tabreed shares by April 2019.

Mubadala has agreed to this form of payment, Tabreed said in the statement. The proposals are subject to shareholder approval in the company's annual meeting to be held on April 9.

Tabreed secured AED3.1bn of financing from Mubadala in March 2011 to help tackle its debt pile. In December last year, the cooling firm agreed to issue AED1.13bn in convertible bonds to Mubadala as part of a recapitalisation plan.

Mubadala currently owns 27.3 percent of Tabreed.

The cooling firm reported a 30 percent rise in quarterly profits fueled by higher revenues from its core chilled water business.

Shares of Tabreed have climbed 39.7 percent this year on the Dubai bourse.

For all the latest industry news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.