French energy company buys 40% Tabreed stake for Dh2.8 billion

The National Central Cooling Company, popularly known as Tabreed, on Monday announced that French energy firm Engie is making an investment of approximately Dh2.8 billion to become a significant shareholder in the utility company.
In a statement, the leading regional UAE-based district cooling utility company said Engie has agreed to buy a 40 per cent stake in Tabreed and help drive the company's expansion in emerging markets such as Turkey, India and Egypt.
"This is a very positive development for Tabreed which underscores the progress made by Tabreed over the last several years as a leading district cooling company in the region," Jasim Thabet, CEO of Tabreed, said.
"As Tabreed enters a new phase of growth, we are confident that we will benefit from Engie's global industry-leading experience, especially in the areas of operations and business development which are cornerstones of our expansion strategy across the GCC," he added.
Headquartered in France, Engie is a multinational energy leader and expert operator in the business of electricity, natural gas and energy services. According to an announcement by Mubadala Investment Company and Engie, Mubadala will convert all of its mandatory convertible bonds into shares, with 1.086 billion shares (equivalent to a 40 per cent shareholding in Tabreed) being transferred to Engie at a price of approximately Dh2.62 per share. The remaining shares will be retained by Mubadala, taking its total shareholding in Tabreed to 1.137 billion shares, or approximately 42 per cent.
"This new partnership is a strong endorsement of Tabreed's financial strength and leading market position. We are very well placed to take advantage of growth opportunities in the region and we expect the presence of a global player like Engie to further enable us to reach our long-term objectives. We welcome Engie to Tabreed and express our continued appreciation to Mubadala for its support as a major shareholder in Tabreed," Thabet said.
The transaction is expected to complete in the third quarter of 2017, once the required regulatory approvals are granted.
"Tabreed is a company with a strong growth trajectory and will benefit from Engie's experience as an operator of world-class utility businesses," Homaid Al Shimmari, deputy group chief executive of Mubadala, said in a statement, adding that Mubadala would remain a significant, long-standing shareholder.
Tabreed will become one of Engie's main regional development platforms and the French company is expected to lead rapid growth for Tabreed in new emerging markets such as India, Egypt and Turkey, the statement said.
Shares in Tabreed, which provides cooling for buildings and other infrastructure, surged 15 per cent to hit their daily limit of Dh2.12 in early trading on Monday.
Tabreed is a partner of choice for organisations across the GCC in providing environmentally friendly district cooling solutions. With 71 district cooling plants located throughout the region, Tabreed currently delivers over 1 million RT, refrigeration tons, to key developments in the region including iconic infrastructure projects such as Abu Dhabi's Al Maryah Island, Yas Island, Sheikh Zayed Grand Mosque, Dubai Metro, Dubai Parks and Resorts, and the Jabal Omar Development in Makkah. 
- business@khaleejtimes.com