69WK Euro.bk. 31

 

TIDM69WK 
 
RNS Number : 2155I 
Tabreed 08 Financing Corporation 
08 March 2010 
 

8 March 2010 
For Immediate Release 
 
      TABREED STRATEGIC BUSINESS REVIEW LEADS TO RECAPITALIZATION PROGRAM 
 
                Un-audited full-year results for 2009 announced 
 
Highlights: 
 
·     Total revenues for 2009: AED 742 million (2008: AED 735 million) 
·     Gross profit was AED 291 million; after impairments, net loss (Tabreed's 
share) was 
AED 1,118 million for 2009 
·     Revenue from the core chilled water business rose 29 % and gross profit 31 
% over 2008 
 
National Central Cooling Company PJSC ('Tabreed'), the Abu Dhabi-based utility 
company, released its un-audited 2009 year-end financial results today. The 
results revealed that for the twelve months ended 31 December 2009, total 
revenues were AED 742 million - a slight increase over 2008 figures. Tabreed's 
gross profit was AED 291 million in 2009. However, after finance costs, results 
from associated companies, a non-cash impairment charge and other items, Tabreed 
recorded a loss of AED 1,118 million for the year. This compares with a profit 
of AED 73 million in 2008. 
 
Due to the challenges facing Tabreed, the Board of Directors appointed a new 
management team in mid-2009 which comprised of seasoned utility sector experts. 
The team undertook a comprehensive review of Tabreed's project portfolio, 
contracts, business plan, financial performance, liquidity position and overall 
capital structure.  Based on this review, the management team  recommended, and 
the Board of Directors approved: 
 
·     Declaring a non-cash impairment charge of AED 1,161 million for 2009 to 
reflect the long-term value of projects in light of the current difficult 
economic climate; and 
·     A short-term financing facility from Mubadala Development Company PJSC 
('Mubadala') of AED 1.3 billion to provide funding while Tabreed completes the 
recapitalization program.  As part of the recapitalization program, this 
senior-debt financing will be available until the end of 2010 and may be 
converted to long-term capital. 
 
The Board also approved submitting to the shareholders a recapitalization plan 
to achieve a stable long-term financial profile and capital structure, the 
elements of which include: 
·     Entering into discussions with strategic investors to provide long-term 
capital necessary to support the development of the business.  Options for new 
capital include a private placement and/or public offering; and 
·     Proactively engaging with creditors to support the recapitalization. 
 
By mid-April 2010 the Board intends to call for an Extraordinary General 
Assembly (EGA) of the shareholders to vote on resolutions authorizing the Board 
to conclude a recapitalization of the company through one or more of: a capital 
reduction, issuance of new capital raising instruments and arrangements with 
creditors, banks and Sukuk holders. 
 
Tabreed will continue to liaise closely with SCA throughout the recapitalization 
program. 
 
Tabreed Board Chairman, Khadem Al Qubaisi commented:  "Tabreed's Board of 
Directors requested a strategic review in order to understand the challenges 
facing the company's finances and business model. . Such a review was essential 
in the wake of the economic downturn, which hit Tabreed at the peak of an 
unprecedented growth program. In parallel with the review, the Board tasked the 
new management team with the immediate implementation of corporate governance 
and process controls with a priority of achieving efficiencies both in the 
business model and cost structure.  The recommendations of the Board announced 
today will help ensure that Tabreed can continue to support infrastructure needs 
as well as provide long term competitive returns for investors." 
 
Tabreed CEO, Sujit S. Parhar commented: "Over the course of 2009, we initiated a 
process of reviewing the business model and cost structure which has led to 
re-engineering of the company so we could take decisive action to address the 
challenges facing the business." 
 
"In addition to today's announcement, the review has led us to focus on 
value-engineering future plants and networks. Our priority is to work according 
to strict needs-assessments, best-in-class design, delivery and operations and 
ensure firm commitments from customers in advance of construction as well as to 
secure a long-term financing structure for the business. The changes we have 
made in these difficult times are designed to better position Tabreed to deliver 
consistent returns for its shareholders over time.  Completion of the 
recapitalization of Tabreed will allow us to focus on growing our core business 
and safeguarding our quality assets. The short-term financing from Mubadala will 
allow us to continue to operate through the recapitalization program." 
 
Un-audited 2009 Results and Corporate Highlights: 
·     Revenues from the company's core business of chilled water increased 29 
per cent in 2009 as three new plants (UAE University at Al Ain, Yas Island and 
T-7) came online during the year and several new customers were connected. Total 
billed capacity for chilled water in 2009 was 339,572 tonnes, an increase of 
65,371 tonnes over 2008. 
·     Three new cooling plants came online in 2009, bringing Tabreed's total 
installed cooling capacity to 395,100 tonnes across 36 plants. In addition, 16 
cooling plants and two plant expansions were under construction as of 31 
December 2009, of which 13 plants and one plant expansion are expected to come 
online in 2010 adding a further 148,300 tonnes of cooling capacity. 
·     Contracting revenues in 2009 derived from Tabreed's 100 per cent owned 
contracting subsidiary Gulf Energy Systems, increased by 38 per cent over 2008, 
due to major piping network contracts including Sowah Island and Reem Island. 
·     Revenues from Tabreed's 60 per cent owned manufacturing subsidiary, 
Emirates Pre-insulated Pipes Industries, declined by 30 per cent in 2009 
compared to 2008, reflecting the economic downturn and reduced order books. 
·     Revenues from the company's building services division which includes Ian 
Banham & Associates, I2I and Cooltech declined by 46 per cent in 2009 over 2008 
largely due to the regional real estate slowdown. 
 
 
The results announced today are un-audited and as such are subject to change 
until the audit is completed. 
 
 Appointment of Director 
Tabreed announces the appointment of Sujit S. Parhar to the Board of Directors. 
 
                                    - ends - 
 
For more information: 
Farah Ibrahim 
TRACCS 
Tel: +971 4 3672530 
TRACCS 24/7 Media Hotline: +97150 9448389 
Email: farah.ibrahim@traccs.net 
 
Ross Bethell, Tabreed Corporate Communications Director 
rbethell@tabreed.com 
 
 
About Tabreed 
Tabreed is an Abu Dhabi-based utility company that caters to the ever-growing 
demand for costeffective, environment-friendly and efficient year-round cooling 
solutions in the Middle East. Founded in June 1998 and listed on the Dubai 
Financial Market, Tabreed is the largest district cooling provider in the world 
delivering sustainable long-term returns for its shareholders and comfort for 
all of its customers. Tabreed currently owns and operates 36 district cooling 
plants, and via wholly-owned joint-ventures and subsidiaries has operations in 
Bahrain, Kuwait, Oman, Qatar and Saudi Arabia. Tabreed is an integral part of 
the region's infrastructure growth, providing cooling solutions to a 
wide-variety of residential, commercial and military communities. 
 
For more information please visit www.tabreed.com 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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