Tabreed exploring bid for Multiply's district cooling business, sources say
Engie-backed National Central Cooling Co, also known as Tabreed, is exploring a bid for Multiply Group's district cooling business that could be worth at least $1 billion, two sources with knowledge of the matter told Reuters.
Tabreed is working with Citi on the potential offer for Multiply's PAL Cooling Holding (PCH), said the two sources, declining to be named as the matter is not public.
Tabreed and Citi declined to comment. Multiply did not respond to a request for comment.
Abu Dhabi-based investment holding company Multiply is controlled by IHC.
District cooling plants, which deliver chilled water via insulated pipes to cool offices, industrial and residential buildings, have been developed as a more economical and environmentally friendly alternative to air conditioning.
They are popular in the United Arab Emirates and elsewhere in the Arabian Peninsula, where summer air temperatures can soar above 50 degrees Celsius (122 Fahrenheit).
Founded in 2006, PCH has several plants in Abu Dhabi with a combined design capacity of 242,000 refrigeration tonnes (RT), according to its website.
It benefits from long-term agreements with clients including developers Aldar and Reem Developers, which are riding a construction boom across the Gulf country, including in the capital city.
Tabreed's possible bid follows a deal announced last year under which it was awarded the concession to provide district cooling to Dubai's Palm Jebel Ali, a man-made palm-shaped island double the size of the world-famous Palm Jumeirah.
Palm Jebel Ali, which is being re-developed after years of inactivity due to a real estate crash, is projected to host over 80 luxury hotels and resorts and attract around 35,000 families.
Bloomberg had previously reported that Multiply was considering selling the division and was working with Standard Chartered on the deal.
(Reporting by Andres Gonzalez in London and Hadeel Al Sayegh in Dubai, additional reporting and writing by Federico Maccioni, editing by Anousha Sakoui and Sharon Singleton)
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