Abu Dhabi: National Central Cooling Company (Tabreed) announced the successful syndication of a landmark term-loan facility, which was pre-funded by HSBC Bank Middle East Limited in March 2020, as part of the company’s acquisition funding of a 80 per cent stake in Emaar Properties Downtown Dubai district cooling business.
The $692 million loan has a tenor of 5 years and was structured as a multi-tranche syndicated facility with Islamic and conventional tranches (the facility). The syndication was successfully closed and over-subscribed by a diverse group of nine international, regional and local banks.
In addition to financing the acquisition of Tabreed’s stake in the Downtown Dubai district cooling business, the facility will also support the development of a new state-of-the-art district cooling plant in Downtown Dubai. The Downtown Dubai district cooling scheme currently provides 148,471RT of contracted capacity through a network that distributes chilled water produced in 3 already existing interconnected district cooling plants.
“The successful syndication of this loan facility underscores Tabreed’s strong business fundamentals, the solid relationships with our key partnering banks and the confidence the financial markets have in our expansion projects, both in Dubai and across the region,” said Bader Al Lamki, Chief Executive Officer at Tabreed.
The facility saw participation from nine banks, with over 40 per cent of the deal subscribed to by regional and international.
“This transaction is a major milestone in Tabreed’s growth transformation strategy, successfully executed notwithstanding the unprecedented environment owing to the unforeseen market condition,” commented Mohammad Al Marzouqi, managing director, head of Abu Dhabi Coverage, Global Banking, HSBC Bank Middle East Limited.
Following the completion of the Downtown Dubai district cooling transaction, Tabreed’s presence in Dubai increased to 278,801 RT and its total capacity increased by 13.5 per cent to 1,342,574 RT from 83 plants.
With 83 district cooling plants, Tabreed currently delivers over 1.342 million refrigeration tons to key developments, including iconic landmarks such as the Burj Khalifa, Dubai Opera, The Dubai Mall, Shaikh Zayed Grand Mosque, Al Maryah Island, Yas Island and Ferrari World Abu Dhabi, Dubai Metro, the Bahrain Financial Harbour and the Jabal Omar Development in the Holy City of Mecca in the Kingdom of Saudi Arabia.
“The successful syndication of the Facility, against challenging market backdrop demonstrates our leadership in structuring and executing major syndicated financing for major government-related entities where we can bring in our structuring and product expertise,” said Amir Riad, global head of Corporate Finance and Investment Banking at ADIB.
The company's board authorised such an issuance, in one or more tranches, over the next 12 months and said the timing would be determined as it sees fit.
They will be offered to qualified investors but not be for public subscription in the United Arab Emirates and will not be listed on any UAE financial market.
In April, Tabreed bought an 80% stake in Emaar Properties' Downtown Dubai district cooling business for 2.48 billion dirhams ($675.23 million). Emaar kept a 20% share in the business.