Dubai’s Empower Said To Appoint Banks For $600m Financing
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Dubai’s Empower Said To Appoint Banks For $600m Financing

Dubai’s Empower Said To Appoint Banks For $600m Financing

Empower is planning a takeover of rival utility Palm District Cooling, say sources.

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Emirates Central Cooling Systems Corp. appointed Citigroup Inc. and Standard Chartered Plc to help finance a takeover of rival utility Palm District Cooling, according to two bankers familiar with the matter.

The acquisition loan will be for $600 million and priced at 205 basis points above the London Interbank Offered Rate, the bankers said, asking not to be identified as the information isn’t public. Emirates NBD PJSC and Mashreqbank PSC will also help finance the deal, according to the bankers.

The takeover will probably be completed by year’s end, one of the bankers said. The expected acquisition price is $500 million, with a further $100 million targeted for investment, the bankers said. A wider syndication of the loan will probably take place early next year, one of the people said.

The Middle East Economic Digest reported last month that Empower, majority owned by Dubai Electricity & Water Authority, was in advanced talks to buy Palm District, owned by Istithmar World, a subsidiary of Dubai World.

The sale of Palm District Cooling is the latest asset disposal by Istithmar, whose parent company, Dubai World, needs to repay $4.4 billion to creditors in 2015. Istithmar World sold hotel resort Atlantis to Investment Corporation of Dubai earlier this month for an undisclosed sum and also its 50 percent stake in the Fontainebleau Miami Beach Hotel.

An Empower spokeswoman declined to comment. Istithmar World declined to comment. Standard Chartered, Citigroup and Mashreqbank also declined to comment, while Emirates NBD didn’t respond to e-mailed requests for comment.


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