ABU DHABI // The National Central Cooling Company, or Tabreed, will hold an extraordinary general meeting next month to vote on plans to restructure two Islamic bonds and possibly issue new debt, as it reels from a difficult year. Tabreed announced a surprise Dh1.12 billion (US$304.9m) loss for 2009, after the slowing property sector hit its cooling plant business. Mubadala Development, the strategic investment arm of the Abu Dhabi Government and the compan';s largest shareholder, lent it Dh1.3bn earlier this year as Tabreed undergoes a revamp.
At a meeting on April 21, Tabreed shareholders will vote on whether to give the board of directors the authority to raise as much as Dh4.2bn in bonds or sukuk, according to a disclosure to the markets yesterday. They will vote on allowing the board to restructure a $200m sukuk due in 2011 and a Dh1.7bn sukuk also due in 2011. "No decisions have been made regarding any debt restructuring or pending sukuk payments," Tabreed said in a statement. "However, we do acknowledge that the short-term maturity pressure is likely to be an impediment to raising new equity."
The shareholders will also vote on whether to continue the company, as per the UAE Commercial Companies Law, which requires an extraordinary general meeting to consider liquidation if a company's losses amount to half or more of the capital. A dissolution of Tabreed would be unlikely, with the Government holding the majority of the company through direct and indirect investments. "Mubadala has every confidence in Tabreed's Board and management team following their strategic review of the business, which identified the need for a recapitalisation programme in order to secure its long-term future," Mubadala said in a statement yesterday. "Mubadala is a minority shareholder in Tabreed and, in common with other investors, we are committed to realising the long-term benefits of our investment. We look forward to seeing how that may be achieved."