Tabreed, a district cooling company based in Abu Dhabi, announced annual profits of Dh136.82 million today and said it reached an agreement with banks on a plan to restructure debt.
The debt restructuring, combined with financing from Abu Dhabi's Mubadala Development, were worth a combined Dh4.5 billion. The moves were meant to get Tabreed back on a solid financial footing after it suffered more than Dh1bn in losses in 2009.
Like other district cooling operators in the UAE, Tabreed was thrown into distress by the property downturn that started in late 2008. It spent billions of dirhams building air conditioning plants, but revenues for the company's services slowed as projects were delayed and scaled back.
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"Today's announcement is significant not only because of the strong full-year unaudited results for 2010, but also because the approval of the terms of the refinancing by our bank lenders is a decisive step towards the successful recapitalisation of Tabreed," Khaled Al Qubaisi, Tabreed's managing director, said in a statement.
As part of the restructuring, about Dh2.63bn of bank debt is to be consolidated and Tabreed is to be given more time to repay. Banks are also providing a Dh150m revolving loan to the company.
Mubadala, which owns around 11 per cent of Tabreed, will extend an additional Dh400m bridge loan to Tabreed to help keep its business humming. Mubadala, a strategic investment company owned by the Abu Dhabi Government, already provided a Dh1.3bn bridge loan last year.
In addition to its bank debt and Mubadala's bridge loans, Tabreed has a Dh1.7bn Islamic bond that converts into shares in May and $200m of Islamic debt due in July.
afitch@thenational.ae
