EMICOOL signs AED 669 million Syndicated Islamic Finance facility to fund expansion project
Emirates District Cooling Company LLC (EMICOOL), a Joint Venture between Union Properties PJSC and M’Sharie, (the private equity arm of Dubai Investments PJSC), signed a Syndicated Islamic Finance Facility of AED 669 million on 12th May 2008 with seven leading banks to fund the first phase of its AED 2.5 billion expansion plan.
The Syndicated Islamic Finance Facility is arranged jointly by Badr Al Islami, Emirates Islamic Bank and Standard Chartered Bank as Initial Joint Mandated Lead Arrangers and the Commercial Bank of Dubai, Dubai Islamic Bank, Emirates NBD and Union National Bank acted as Joint Mandated Lead Arrangers in the syndicate.
The Syndicated Islamic Finance Facility agreement was recently signed by Abdul Aziz Yaqoob Al Serkal, Managing Director of M’Sharie and Chairman of Emicool.
“This syndication opens up new strategic avenues for EMICOOL, and will help to set the company on a sustainable high growth trajectory,” Al Serkal said. “We view the enthusiastic response from the banking community as further proof of EMICOOL’s distinguished market reputation and excellent growth potential.”
“We are also pleased that we were able to secure the financing at a rate that, under prevailing market conditions, can be considered extremely competitive,” Al Serkal added.
The facility is repayable in one bullet payment within 3 years, from the proceeds of a future Islamic Finance Facility or a Sukuk issue.
Abdul Aziz Serkal said, “EMICOOL has drawn up ambitious plans for the future, and continued expansion of production capacity forms the centerpiece of our business strategy. As the demand for District Cooling is continuously on the rise across the UAE and Middle East region, it has become imperative for EMICOOL to optimize production capacity and further enhance its technological capabilities to meet growing market requirements more efficiently.”
Mr. Serkal further added that “The financing proceeds will mainly be used to fund EMICOOL’s projects at Dubai Motor City and Dubai Investments Park. EMICOOL estimates that its ambitious expansion plans will require an investment of AED 2.5 billion over the next 5 years. In this regard, Emicool expects to raise twice the amount of the current syndication in the future to refinance the existing facility and meet future requirements.”
A joint venture between M’Sharie and Union Properties PJSC, EMICOOL provides highly reliable, efficient and environment friendly district cooling services that are much more cost-effective when compared to conventional cooling systems and processes. With this advanced district cooling system combined with state-of-the-art technology from the USA, EMICOOL supplies chilled water to the entire Green Community, Ewan Residence and other residential/commercial developments in Dubai Investment Park. EMICOOL enjoys exclusivity for Dubai Investments Park and Motor City and is the sole district cooling provider for these developments.
Badr Al Islami, Mashreqbank psc is the Structuring Advisor and the Investment Agent for this Syndicated Islamic Finance Facility.
Moinuddin Malim, Corporate and Investment Banking Head at Badr Al Islami said, “Emicool has been able to raise funding from a syndicate of banks who understand the district cooling business and have accordingly priced the transaction. Badr has coordinated this deal for Emicool and is pleased to see banks working together to jointly close this deal”.
“It was our pleasure to participate in this transaction. Our role in EMICOOL is one among those transactions which added a new tombstone to the growth of Emirates Islamic Bank. This is the 3rd consecutive year where Emirates Islamic Bank has shown a remarkable growth through playing important roles in several Sukuk issues, syndications and participating in direct equities and investment funds in the regional and international market” said Mr. Abdulla Showaiter, General Manager - Corporate & Investment Banking at Emirates Islamic Bank.
"Standard Chartered Saadiq is honored to be associated with this debut Islamic fund-raising for Emicool. This further underscores our award-winning track-record and leadership in Islamic project financing" said Hassan Jarrar, Country Head of Origination and Client Coverage at Standard Chartered Bank.
“It was our pleasure to be associated with this transaction. Our involvement in this transaction reflects CBD’s active pursuance in local project finance / syndicated loan market. We believe that this transaction is not only adding a high quality asset on our book, but also further diversifies our existing syndicated loan portfolio. We wish Emicool success in all their future endeavors”, said Mr. Hassan Al Redha, Head – Financial Institutions at Commercial Bank of Dubai.
Mr. Naveed Ali, Chief of Corporate Banking, Dubai Islamic Bank said, “Dubai Islamic Bank is very pleased to serve as joint mandated lead arranger for this significant transaction, which will support the expansion of Emicool’s activities at major new developments in Dubai. The innovative Sharia compliant structure of this financing vehicle has been set up to provide maximum flexibility to Emicool, and provides further evidence of DIB’s leading role in project finance. We remain committed to supporting the infrastructure development of Dubai and the wider region.”
“We are delighted to be associated with this prestigious transaction”, said Rajan Khetarpal, Head, Global Debt Capital Markets & Overseas Corporates, Emirates NBD. “This is in line with our strategy and commitment to support infrastructural projects in the region.”
“UNB is pleased to be part of the EMICOOL syndication which was professionally handled by Badr Al Islami and which hopefully would be the start of a fruitful relationship between the two organizations”, said Ehab Elsaadani, VP & Department Manager, Islamic Banking Group – Dubai at Union National Bank.
