Tabreed is proposing to issue Dh1.7 billion (US$463 million) of convertible notes as the Abu Dhabi based district cooling company reaches the final stages of its debt restructuring plan.
Under the agreement, the company said it would also raise as much as Dh1.4bn through a loan from Mubadala Development, the Abu Dhabi strategic investment vehicle.
The money will be used to help put the firm's business back on a sustainable footing after the property downturn cut its revenues.
"The board of directors is pleased that Tabreed has successfully entered the final stages of its recapitalisation programme," said Khadem al Qubaisi, Tabreed's board chairman, in a statement today.
As part of the deal, Mubadala will provide up to Dh3.1bn in new long-term capital commitments. It includes Dh1.7bn of subordinated mandatory convertible notes to refinance the company's existing Dh1.7bn bridge financing. The notes mature in 2019.
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The Dh1.4bn subordinated convertible loan "may be drawn by the company to satisfy certain liquidity needs, complete its build-out programme and pursue near-term growth opportunities," it said.
Talks over Tabreed's restructuring and recapitalisation started early last year, when its board sought approval from shareholders to seek new terms on debt. Tabreed is listed on the Dubai Financial Market.
