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Tabreed proposes to pay dividend to all shareholders

Mubadala to be paid equivalent amount in convertible bonds

Gulf News

Dubai: Dubai Financial Market (DFM)-listed district cooling firm, National Central Cooling Company (Tabreed) on Monday proposed to pay a cash dividend of 5 fils per share to all its shareholders, the accompany said in a filing to the stock exchange.

The dividend payment is the first since 2007. In addition to the dividend payout for all shareholders, the company has also proposed to pay an equivalent amount to Mubadala which holds non-coupon bearing convertible bonds of Tabreed.

“Subject to the approval of the shareholders, Mubadala will be made a payment equivalent to 5 fils per share. However, this payment will be made as new non-coupon bearing convertible bonds,” said a company spokesperson.

The proposals are subject to shareholder approval at the company’s annual meeting, to be held on April 9.

The prospect of new convertible bonds issuance hit Tabreed shares which fell 4.7 per cent yesterday. The issuance of convertible bonds could mean an increase in number of shares which negatively impacted the shareholder sentiment.

In 2011 March, Tabreed received Dh3.1 billion in financing from Mubadala as part of a financial restructuring. It comprised Dh1.7 billion in mandatory convertible notes due 2019 and a loan facility of as much as Dh1.4 billion, Last December the company agreed to convert Dh1.13 billion of the loan into convertible bonds. The bonds could be converted into ordinary shares by April 2019.

The Dubai-listed firm posted a net profit of Dh68.7 million in the fourth quarter ended December 31, 2012, compared with Dh52.9 million in the comparable period in 2011. The company made 2012 net profit of Dh236.3 million, up 29 per cent compared to the previous years.