ABU DHABI //Tabreed says it will defer payments due next month on a Dh1.7 billion (US$462.8 million) sukuk as it plans its future. Tabreed, the district cooling company, said yesterday it would convene a meeting tomorrow to vote on a recapitalisation programme to help it "achieve a stable, long-term financial profile and capital structure". The company generates its profits by providing air-conditioning and has been hurt by the slowdown in the property industry.
The deferral comes as Tabreed reported profit of Dh40.4m for the first three months of the year, up from Dh10.7m for the same period last year. The results sent the company's stock 3.2 per cent higher yesterday at the Dubai Financial Market, its biggest one-day gain in a month. The stock is still down about 44 per cent this year. The sukuk payment is due on May 19. The Abu Dhabi strategic investment arm Mubadala Development and the infrastructure investment company ACWA Holdings hold most of the sukuk, which mature next year, and support the decision, Tabreed said.
"While we are very pleased with the first-quarter results, which reflect the hard work of the management team under the direction and supervision of the board, we recognise that there are challenges that face the business in the year ahead," said Khaled al Qubaisi, the managing director of Tabreed and a senior adviser at Mubadala. "The initial discussions we have had with key stakeholders in respect of the recapitalisation of the company is positive and encouraging."