Dubai Investments pays Dh500m to purchase 50% stake in Emicool
▶ Deal strengthens DI portfolio and gives it full control of the district cooling company
Dubai Investments, an investment holding conglomerate listed in Dubai , has acquired an additional 50 per cent stake in Emirates District Cooling (Emicool) from Union Properties for Dh500 million, giving it full ownership of the utilities company.
“The transaction strengthens Dubai Investments’ portfolio in the utility service domain, growing its asset base, and is expected to boost future profitability and deliver value to shareholders,” Khalid bin Kalban, managing director and chief executive officer of Dubai Investments said in a statement to Dubai Financial market (DFM), where its shares are traded.
“Emicool has carved a niche in the district cooling sector, and Dubai Investments’ acquisition will spur its growth and expansion plans amidst surging demand in the region.” Mr Kalban on January 10 told
The National that Dubai Investments had the “first right of refusal” for Union Properties’ 50 per cent stake in the district cooling firm and the company as the founding JV partner of Emicool had informed the Dubai developer of its interest in buying the additional stake.
As a result of the acquisition, Dubai Investments’ earnings before interest, taxes, depreciation and amortization (Ebidta) is expected to rise by Dh110m. Its total assets would increase by Dh1.8 billion and the liabilities would grow by Dh1.2bn, the company said in the bourse filing.
Emicool, based in the Dubai Investments Park, was established in 2003 as a joint venture with Union Properties and provides district cooling services to more than 19,000 customers in the UAE.
The company is planning to increase its capacity to 500,000 tonnes of refrigeration by 2020 due as demand for district cooling in the UAE and the region continue to grow.
Union Properties said in a separate statement that it had received several offers to buy its stake in Emicool, from both local and international companies, after it decided to shift its strategy and put its stake in the district cooling company on the block.
Upon notifying Dubai Investments of its plan to sell its stake, the conglomerate exercised its right as a partner in the business to buy the stake it does not already own, Union Properties said.
The final legal steps of the deal to give Dubai Investments full ownership of Emicool were concluded on January 18, it said.
“The year 2018 marks the beginning of a new phase in the development and growth of Union Properties,” said Nasser Butti Omair Bin Yousif, the chairman of Union Properties.
“After finalising the development of the company’s longterm strategy in the second half of last year and following the successful launch of several new projects and subsidiaries, the sale of our entire stake in Emicool is part of our new strategic approach.
“We will invest the proceeds of this sale in enhancing our investment portfolio, expanding our operations and development projects, and supporting the group’s growth strategy.”
Union Properties said on January 11 that it acquired a 5.7 per cent stake in Egyptian developer Palm Hills Development to diversify revenues and expand into new markets.
The developer is reorganising its finances in the wake of sliding real estate prices in the UAE. The developer’s new management team wrote down the value of its assets by Dh2.8 billion last year.