TABREED, the Middle East’s largest cooling company, will get a 354m bail-out from Abu Dhabi after it unveiled a loss for last year and said it needed to recapitalise.

The Abu Dhabi state investment vehicle Mubadala — which has a 16,7% stake in Tabreed, also known as National Central Cooling — would offer bridge financing to cover Tabreed’s needs while it completed a recapitalisation programme that was expected to last most of this year, Tabreed said yesterday.

Dubai-listed Tabreed, which provides cooling for projects such as the Dubai Metro and Abu Dhabi’s Yas Island, posted a surprise a 1,12-billion dirham (305m) loss for last year due to a noncash impairment charge of 1,16-billion dirhams, making it the latest Gulf company to suffer from the property market crash.

“The 1,3-billion-dirham loan is sufficient to take us through the recapitalisation process,” Tabreed chief financial officer Steve Ridlington said. “The funding from Mubadala will enable us to pay our bills through most of this year during the recapitalisation phase.”

Shares in Tabreed were down 9,5% early yesterday, near the maximum 10% allowed, underperforming Dubai’s bourse, which was off 0,7% to 1610 points.

“I’m not surprised that Mubadala has come in,” Shuaa Securities CE Mohammed Yasin said. “As far as I am concerned it’s definitely a bail- out but it’s a positive move in the sense that the government is helping out a firm close to its heart.

“I think the company was unable to refinance its debt earmarked for the continuation of its expansion plans,” Yasin said.

In February, ratings agency Standard & Poor’s lowered Tabreed’s long-term issuer credit rating to CCC+ from B+, reflecting concern about weak liquidity.

Tabreed was in talks with strategic investors to provide long-term capital to support the business, the company said in a statement released earlier yesterday. Options for new capital include a private placement or public offering.

Ridlington declined to give further details. [Read More]