Tabreed begins sale of Dh1.5b Islamic bonds

Dubai: National Central Cooling Co, the UAE-based refrigeration company known as Tabreed, has begun promotional meetings for a Dh1.5 billion ($408 million) sale of convertible Islamic bonds.

Tabreed's fixed-rate Ijarah sukuk, maturing May 2011, will pay an annual distribution of between 6.5 per cent and 7.5 per cent, sale manager Morgan Stanley said in an e-mailed statement on Sunday.

The sukuk will convert into shares at a price of between 8 per cent and 13 per cent more than the stock's average price between the start of the offering and its close, according to the statement.

Tabreed on April 13 said it hired Morgan Stanley, Standard Chartered and National Bank of Abu Dhabi to help it sell compulsorily convertible sukuk in the Middle East, Europe and Asia to help finance expansion.

Future plans

Meetings with potential investors began in Abu Dhabi yesterday, followed by Hong Kong on Monday and London on April 22, according to a statement. Tabreed intends to list the securities on the London Stock Exchange.

Tabreed rose one per cent to Dh2.62 at 10.18am in Abu Dhabi yesterday, giving the company a market value of Dh3.2 billion. The stock has fallen 17 per cent this year.