National Central Cooling weighed on Dubai's index yesterday after its shares dropped to the lowest level in almost a week amid dilution worries from minority shareholders over a dividend payout.
Shares in the firm, which trades as Tabreed on the Dubai Financial Market fell 4.7 per cent to close at Dh1.61 each. It fell as much as 6.5 per cent during trading. More than 40 million shares changed hands, with a total value of Dh71.2m.
On Thursday, Tabreed suggested a five fils cash payout to shareholders, its first in more than eight years. Tabreed's major shareholder, Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, is also entitled to dividends. It has accepted notes that are convertible to shares by April 2019.
Tabreed was hit hard when the fall of property values and stalled projects in Dubai cut demand for air conditioning after the global financial crisis. Following Tabreed's agreement to restructure its debts with banks in 2011, Mubadala threw a lifeline to the cooling company with long-term capital of Dh1.7 billion in convertible bonds and a loan facility worth US$1.4bn.
"The stock is falling on further dilution concerns to shareholders," said Marwan Shurrab, fund manager at Gulfmena Investments
The Dubai Financial Market General Index slipped 0.1 per cent to close at 1,944.01 points.
Banks lifted Abu Dhabi's index. National Bank of Abu Dhabi and First Gulf Bank rose 0.4 per cent and 1.1 per cent to close at Dh11.25 and Dh13.35, respectively. The Abu Dhabi Securities Exchange General Index finished 0.22 per cent higher to close at 3,034.66.