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National Central Cooling Co, popularly known as Tabreed, is interested in acquiring the district cooling unit that serves Dubai International Airport, its chief executive Bader Al Lamki said on Monday.
The Dubai-listed Tabreed has been on a shopping spree during the Covid-19 pandemic, snapping up assets in locations such as Abu Dhabi’s Saadiyat Island, home to a Louvre museum. It also acquired an 80 per cent stake in Dubai developer Emaar’s downtown district cooling business for Dh2.48 billion ($675 million).
“Dubai (international) airport has been in the market. We are looking at it. We will see how it goes,” Al Lamki told Reuters in an interview.
District cooling firms deliver chilled water via insulated pipes to offices, as well as industrial and residential buildings. With 86 district cooling plants, Tabreed services developments such as the Burj Khalifa, the world’s tallest skyscraper, the Dubai Opera and the Dubai Mall.
Dubai International’s 2020 passenger numbers fell 70 per cent to 25.9 million as the pandemic crippled travel demand. In 2019, before the pandemic, it saw 86.4 million passengers, making it one of the world’s busiest airports.
Two sources familiar with the matter told Reuters in November that Dubai was considering selling a controlling stake in the cooling system operations of the state-owned airport, with one of the people saying Standard Chartered has been hired to advise on the sale. The Dubai government media office did not respond to a request for comment at the time, while Standard Chartered declined to comment.
The transaction is expected to draw a lot of interest from potential investors, both international and local, according to analysts. The business is valued at around $750 million, Bloomberg reported in November, citing unidentified sources.
“Tabreed raised $500 million in October through the issuance of a 7-year bond, with 95 per cent of the participants being international investors,” Al Lamki said.
The company, part owned by Abu Dhabi’s Mubadala and France’s Engie, has enough residual funds from the issuance to work on “one or two” more transactions, the CEO said. However, Tabreed could look at additional financing instruments in the future, he added.
Earlier on Monday, Tabreed reported a 16.5 per cent increase in 2020 net income to Dh550 million while the group revenue increased by 14.5 per cent to Dh1,741 million as against Dh1,520 million in 2019.
The results showed that Tabreed added 39.6k Refrigeration Tons (RT) of organic capacity growth and 181.5k RT of inorganic capacity additions, resulting in the delivery of 1,403,819 RT of cooling capacity at the end of the calendar year.
Tabreed’s board of directors have recommended a return of value to shareholders for 2020 through the combination of a cash dividend of 5.75 fils per share plus a bonus share issue of 1 share for every 45 shares held. This equates at current share price to roughly 11.5 fils/share and represents a 10 percent increase on 2019 dividend.
This cash plus equity dividend in 2020 reflects the Board’s intention to prioritise returning value to shareholders and positions Tabreed strongly to secure further growth opportunities.
Tabreed announced a number of notable achievements during 2020, including the acquisition of the world’s largest district cooling scheme in Downtown Dubai with a total capacity of 235,000RT and two concessions with a total capacity of 88,000RT in Saadiyat Island.
In October, Tabreed raised $500 million through a seven-year, 2.5 per cent coupon bond issuance that was oversubscribed at almost five times its initial size. The company also received several industry awards in 2020.
The Total Group connected capacity across the total portfolio increased to 1,403,819 Refrigeration Tons (RT), and 221.1k RT of new customer connections added.
Also, six new plants added through acquisitions of Downtown Dubai and Saadiyat Island.
Khaled Abdulla Al Qubaisi, Tabreed’s chairman, said, Tabreed has become an international powerhouse in district cooling, with 86 plants and investments in six countries. “Our financial and operational achievements this past year allowed us to achieve impressive results despite a challenging operating environment, solidifying Tabreed’s growth story and its reputation for leading edge innovation within the district cooling sector.”
With 86 district cooling plants, Tabreed currently delivers over 1.404 million RT to key developments, including iconic projects such as the Burj Khalifa, Dubai Opera, The Dubai Mall, Sheikh Zayed Grand Mosque, Al Maryah Island, Yas Island, Dubai Metro, the Bahrain Financial Harbour and the Jabal Omar Development in the Holy City of Mecca in the Kingdom of Saudi Arabia. — With inputs from Reuters
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