x Abu Dhabi, UAEWednesday 17 January 2018

Tabreed secures Dh750m credit line

The loan is a win for the air cooling company, which has had difficulty raising funds since the credit crisis hit the UAE last autumn.

National Central Cooling Company, better known as Tabreed, said today it had secured a Dh750m two-year loan facility from First Gulf Bank. The loan is a win for Tabreed, which has had difficulty raising funds since the credit crisis hit the UAE last autumn. In March, Tabreed also secured Dh268m in an Islamic loan from Abu Dhabi Commercial Bank, which was used to pay off a five-year Islamic bond. Tabreed's expansion plans rely heavily on borrowing money to build district cooling plants, but banks have been reluctant to lend in the last eight months, executives from the company previously said. "Since financing is the cornerstone of a utility company's business plan, we are pleased to have the support from the region's financial markets," said Sujit Parhar, who was appointed chief executive in May. "Such support is important as Tabreed moves to the next stage of its growth." Last December, Standard & Poor's downgraded the company's credit rating to the "low BB" category as a result of "weaker than expected financial performance partly resulting from higher than anticipated capital expenditure". Tabreed responded by selling off some of its plants to infrastructure funds to raise cash. Meanwhile, Mubadala, Abu Dhabi's strategic investment arm, has been taking a larger role in administration of the company, analysts said. The Government of Abu Dhabi now owns about 28 per cent of the company through direct and indirect stakes. District cooling is an efficient air-conditioning system that uses central plants in neighborhoods to create and circulate chilled water into buildings, where it is converted into cool air. bhope@thenational.ae