National Central Cooling Company (Tabreed), the Abu Dhabi-based utility firm, said it has won approval from the shareholders to buy back 28 per cent of the bonds held by the company's largest shareholder Mubadala.

Tabreed, which has about 69 district cooling plants across the Gulf, will said it was looking to buy back 854 million of the bonds held by Mubadala at a cost of Dh1 billion ($272 million) thus giving a major boost to its earnings per share.

The shareholders representing 55 per cent of Tabreed’s capital approved the proposal presented by the company’s board of directors at an Ordinary General Assembly on Sunday. The transaction will be finalized by early July, and the repurchased bonds will be cancelled, the company said in a statement.

Commenting on the buyback plan, CEO Jasim Husain Thabet said: "Our company’s strong and consistent year-on-year performance since 2011 has enabled us to present this important proposal to our shareholders, and we are delighted that they have voted to approve it."

"This initiative is value-accretive for shareholders, and based on 2014 net income, it will increase earnings per share by approximately 2.6 fils, while saving the company over Dh30 million ($8.1 million) annually.

"This buyback is part of our wider strategy to continuously improve our capital structure. It follows our 2014 refinancing, which also delivered annual savings of Dh9 million ($2.4 million). The combined yearly savings from these two transactions will reach approximately Dh40 million ($10.9 million)," stated Thabet.

The buyback will be financed through a new loan which Tabreed secured during its 2014 refinancing, and which has a lower cost of servicing than the bonds it is repurchasing, he added.-TradeArabia News Service