Abu Dhabi: Mubadala Investment Company has agreed to sell a 40 per cent stake in National Central Cooling Company (Tabreed) to Engie, a France-based energy company for Dh2.8 billion, the two companies announced on Monday.
As part of the transaction, Mubadala, which currently owns approximately 82 per cent of Tabreed through a combination of equity and mandatory convertible bonds (MCBs), will be converting MCBs into shares, with 1.086 billion shares — equivalent of a 40 per cent shareholding in Tabreed — being transferred to Engie at a price of approximately Dh2.62 per share.
The remaining shares will be retained by Mubadala, taking its total shareholding in Tabreed to 1.137 billion shares, or approximately 42 per cent.
Shares in Tabreed hit an upper limit of 14.59 per cent to Dh2.12 following the announcement.
“Tabreed is a company with a strong growth trajectory, and will benefit from Engie’s experience as an operator of world-class utility businesses”, said Homaid Al Shimmari, deputy group CEO of Mubadala.
“Mubadala has been, and will continue to be, a significant, long-standing shareholder in Tabreed. Tabreed is a well-capitalised company delivering consistent and sustainable returns to investors, with a strong and growing customer base.”
Mubadala will remain Tabreed’s single largest shareholder following the transaction, which is subject to regulatory approval in the UAE. Completion is expected to occur in the third quarter of 2017.
Mubadala and Engie have also agreed to certain cooperation arrangements designed to support Tabreed’s growth strategy and management team, as long-term shareholders in the company.
Headquartered in France, Engie operates more than 250 low carbon urban heating and cooling networks in thirteen countries, including Spain, Portugal and Malaysia among others.
On the other hand, Tabreed has 71 district cooling plants throughout the GCC, delivering over one million refrigeration tons to key developments in the region.
With the new partnership, Engie expects to lead a rapid growth in emerging markets like India, Egypt and Turkey besides its existing operations across the globe.
Jasim Thabet, chief executive officer of Tabreed, said this is a very positive development for the company, that will benefit from its expansion strategy across the GCC.
“We are very well placed to take advantage of growth opportunities in the region and we expect the presence of a global player like Engie to further enable us to reach our long-term objectives.”
