x Abu Dhabi, UAEThursday 20 July 2017

Tabreed plans to sell off assets

The National Central Cooling Company, or Tabreed, plans to aggressively sell off assets to increase profitability.

Abu Dhabi // The National Central Cooling Company, or Tabreed, plans to aggressively sell off assets in an effort to increase profitability and fuel regional expansion, the new chief executive said today. Karl Marietta, who took over the position this week, said the plan would involve selling between Dh500 million (US$136m) and Dh1 billion worth of district cooling assets to long-term investors each year for the next three years.

"We have been having such massive growth that we have to keep going back to our shareholders to raise capital and lots of debt," he said. "We feel this plan could boost profitability and return on equity, as well as reduce the amount of pressure on raising capital." Dany Safi, the former chief executive, will remain on the board of directors as a special adviser. Last year, Tabreed provided district cooling to about 500 buildings in the GCC. Its largest customer is the UAE Armed Forces, which accounted for 67 per cent of revenues last year.

Mr Marietta said the company's new strategy was still under deliberation. Booz and Company and other consultants have been hired to help. The company had plans to expand even further in the region in keeping with moves to reduce their carbon footprint and save energy costs on projects. District cooling is a dramatically more efficient way of cooling buildings. It works by circulating cold water from a central station through pipes running through buildings.

Khadem al Qubaisi, the company's chairman, said: "We are now ready to embark on a new phase of development which will see the implementation of a new strategy, some refinements to the management structure to boost company revenues and investors' benefits." Tabreed's shares closed at Dh1.55 today, down 32 per cent compared with a year ago. bhope@thenational.ae