Tabreed 06 Prospectus - London Stock Exchange

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Also, Tabreed is obliged to make the payments under the relevant Transaction Documents directly to the Trustee and the Trustee, will have direct recourse against Tabreed to recover payments due to the Trustee, from Tabreed pursuant to such Transaction Documents. Risk Factors relating to the Certificates Plants Becoming fixed to the land Under UAE law, as Tabreed’s cooling plants are fixed to the land on which they are constructed, these cooling plants are deemed to be an integral part of the land on which they are sited. Accordingly, title to the applicable land includes title to the cooling plants which have no separate rights of ownership. As Tabreed does not generally own the land on which its cooling plants are constructed, Tabreed only has contractual rights to use of the land on which the cooling plants are sited and, hence, to the cooling plants themselves. Accordingly, Tabreed will not give any warranty relating to transfer of construction work under the Istisna’a Agreement. Furthermore, Tabreed can only pass title to machinery and equipment relating to each of the Plants whose construction is being financed by the proceeds of the issue of the Certificates. Consequently, where Tabreed fails to pay the Exercise Price under the Purchase Undertaking and, as a result, the Trustee exercises its right to sell the Assets to a third party, the value of the machinery and equipment may be significantly lower than Exercise Price and the Certificateholders may therefore receive less than they would otherwise expect to receive. Tabreed shall remain liable under the Purchase Undertaking for the shortfall between the proceeds of sale to third parties and the Exercise Price. Liquidity of the Certificates Application has been made to the UK Listing Authority for the Certificates to be admitted to the Official List and to the London Stock Exchange to admit the Certificates for trading on the Market. There can be no assurances that a secondary market for the Certificates will develop, or if a secondary market does develop, that it will provide the Certificateholders with liquidity of investment or that it will continue for the life of the Certificates. The market value of the Certificates may fluctuate. Consequently, any sale of the Certificates by Certificateholders in any secondary market that may develop may be at a discount from the original purchase price of such Certificates. Counterparty risk Pursuant to the Commodities Purchase Agreement, the Issuer will use certain of the proceeds of the issue of the Certificates to acquire certain commodities from Tabreed. On the first Periodic Distribution Date, it is intended that such commodities shall be sold by the Issuer to the Counterparty pursuant to the Undertaking to Purchase (Commodities). In the event that the Counterparty fails to comply with its obligations under the Undertaking to Purchase (Commodities), such failure will result in the Issuer being unable to comply with its other obligations under the Istisna’a Agreement. This gives Tabreed the right to trigger an Istisna’a Event of Default which will result in the Certificates being redeemed earlier than the Scheduled Dissolution Date. Consents to Variation of Transaction Documents and other Matters The Declaration of Trust contains provisions permitting the Trustee, (acting on behalf of the Certificateholders), from time to time and at any time without any consent or sanction of the Certificateholders to make any modification to the Declaration of Trust if in the opinion of the Trustee such modification (a) is of a formal, minor or technical nature, or (b) is made to correct a manifest or proven error, or (c) is not materially prejudicial to the interest of Certificateholders. Unless the Trustee otherwise decides, any such modification shall as soon as practicable thereafter be notified to the Certificateholders and shall in any event be binding upon the Certificateholders. Enforcing Foreign Judgments in Dubai Under current UAE law, the courts are unlikely to enforce an English judgment without re-examining the merits of the claim and may not observe the choice by the parties of English law as the governing law of the relevant Transaction Documents and Certificates. Judicial precedents in the UAE have no binding effect on subsequent decisions. In addition, court decisions in the UAE are generally not recorded in publicly available reports. These factors create greater judicial uncertainty. 20
Enforcement of Liabilities Ultimately the payments under the Certificates are dependent upon Tabreed making payments to the Issuer under the Lease Agreement, the Purchase Undertaking and the Istisna’a Agreement. If Tabreed fails to do so, it may be necessary to bring an action against Tabreed to enforce its obligations before the UAE courts which may be costly and time consuming. Investment Agreement Under the Investment Agreement the Issuer shall invest the Investment Amount in Authorised Investments. There is a risk that the banks and financial institutions with whom the Investment Amount (or part thereof) is deposited may fail to pay the Investment Amount (or part thereof) and yields on it to the Issuer on a timely basis in order for the Issuer to meet its obligations to pay Tabreed under the Istisna’a Agreement. This enables Tabreed to trigger an Istisna’a Event of Default which will result in the Certificates being redeemed earlier in accordance with Condition 9. Additional Risks Suitability of Investment The Certificates may not be a suitable investment for all investors. Each potential investor in the Certificates must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should: (a) have sufficient knowledge and experience to make a meaningful evaluation of the Certificates, the merits and risks of investing in the Certificates and the information contained in this Prospectus; (b) have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the Certificates and the impact the Certificates will have on its overall investment portfolio; (c) have sufficient financial resources and liquidity to bear all of the risks of an investment in the Certificates currency; or where the currency for principal is different from the potential investor’s (d) understand thoroughly the terms of the Certificates and be familiar with the behaviour of any relevant indices and financial markets; and (e) be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic and other factors that may affect its investment and its ability to bear the applicable risks. Emerging Markets Investors in emerging markets should be aware that these markets are subject to greater risks than more developed markets, including in some cases significant legal, economic and political risks. Accordingly, investors should exercise particular care in evaluating the risks involved and must decide for themselves whether, in the light of those risks, their investment is appropriate. Generally, investment in emerging markets is only suitable for sophisticated investors who fully appreciate the significance of the risk involved. Change of Law The structure of the issue of the Certificates is based on English law, UAE law and administrative practice in effect as at the date of this Prospectus. No assurance can be given as to the impact of any possible change to English law, UAE law or administrative practice after the date of this Prospectus, nor can any assurance be given as to whether any such change could adversely affect the ability of the Issuer to make payments under the Certificates. Political, Economic and Related Considerations The UAE has seen significant economic growth and relative political stability. There can be no assurance that such growth or stability will continue. Moreover, while the UAE’s federal government policies have generally resulted in improved economic performance, there can be no assurance that such level of performance can be sustained. Tabreed may also be adversely affected generally by political and economic developments in or affecting the UAE. No assurance can be given that the UAE government will not implement regulations or fiscal or monetary policies, including policies or new regulations or new legal interpretations of existing rates 21
Page 1 and 2: TABREED 06 FINANCING CORPORATION (i
Page 3 and 4: Table of Contents Page STRUCTURE DI
Page 5 and 6: above, the Dissolution Distribution
Page 7 and 8: OVERVIEW OF THE OFFERING This follo
Page 9 and 10: ‘‘Margin’’ means 1.25 per c
Page 11 and 12: Redemption for Tax Reasons accordan
Page 13 and 14: Lease Agreement Date. The balance s
Page 15 and 16: (d) fourth, only if such payment is
Page 17 and 18: Governing Law The Declaration of Tr
Page 19: Legionnaire’s Disease Tabreed is
Page 23 and 24: TERMS AND CONDITIONS OF THE CERTIFI
Page 25 and 26: 3 Status - Limited Recourse 3.1 Sta
Page 27 and 28: 4.3 Late Payment Amounts Received I
Page 29 and 30: (i) the amount of any liability in
Page 31 and 32: (d) if LIBOR cannot be determined i
Page 33 and 34: 8.6 Agents act solely as agents of
Page 35 and 36: ‘‘Total Loss Event’’ means
Page 37 and 38: 13.2 The Trustee shall not be bound
Page 39 and 40: 19 Governing Law and Submission to
Page 41 and 42: transferred into the names of holde
Page 43 and 44: Issuer. Unless otherwise agreed, th
Page 45 and 46: Under the Lease Agreement, if Tabre
Page 47 and 48: USE OF PROCEEDS The proceeds of the
Page 49 and 50: * Manufacturing: Tabreed, in conjun
Page 51 and 52: * High barriers to entry. District
Page 53 and 54: Detailed customer profile of plants
Page 55 and 56: Contractual Overview Contracts for
Page 57 and 58: Servicing Ian Banham and Associates
Page 59 and 60: Tabreed Bahrain is setting up its f
Page 61 and 62: Plants Expected Commissioning Date
Page 63 and 64: * Dany Safi, Chief Executive Office
Page 65 and 66: Marketing district cooling services
Page 67 and 68: TABREED 06 FINANCING CORPORATION In
Page 69 and 70: TAXATION The following is a general
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THE UNITED ARAB EMIRATES The UAE is
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The growth of Dubai began in the ea
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Saudi Arabia Any investor in the Ki
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GENERAL INFORMATION 1. It is expect
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FINANCIAL INFORMATION AED Interim C
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ERNST &YOUNG P.O. Box 136 11th Floo
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NATIONAL CENTRAL COOLING COMPANY (P
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ERNST &YOUNG P.O. Box 136 11th Floo
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National Central Cooling Company PJ
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Registered/Head Office of the Issue
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Tabreed 06 Prospectus - London Stock Exchange

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