The shareholders of UAE district cooling provider Tabreed have approved raising up to $1 billion through a sukuk or non-convertible bond.

The DFM-listed firm is able to take advantage of this resolution, which has been passed, during the following twelve months. In the event that the funds are raised in this manner, they will be used by Tabreed to support its ambitious expansion strategy into new markets, particularly India.

After the Board of Directors receives approval from the shareholders, it may issue the bonds and/or sukuk in one or more tranches that are not convertible into shares, either directly or through a special purpose vehicle.

The "profit rate" on the loan issuance can't go above the "market rate that's currently in effect for businesses with the same credit rating as the company."

A strong set of results was released by Tabreed in 2023, largely due to its success in the home market. Due to this, a "record high" dividend payment of 15.5 fils per share has been announced, representing a 15% increase over 2022. Tabreed reported to the parent company that its revenue had increased by 9% and its net profit had increased by 25% to Dh751 million before taxes in 2023.

During the previous year, Tabreed installed six additional facilities and 53,000 refrigeration tonnes [RT] of new connections throughout its network. It is currently active in six nations, Saudi Arabia and Africa included.

"As more countries turn their attention to ever increasing demands for cooling, realising too that they must act to mitigate climate change, district cooling is an obvious and well-established solution," stated Chairman Khaled Abdullah Al Qubaisi.

"Nobody does it better than Tabreed, which is why we are now gearing up for further international expansion."