Tabreed 06 Prospectus - London Stock Exchange

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Tabreed’s existing portfolio of operating plants is shown below: Operating plants Plants Date commissioned Installed capacity (tons) Capital cost (AED mn) Military plants: Tabreed 1............................................................... Nov 99 3,800 49.0 Tabreed 2............................................................... Jun 02 10,000 105.7 Tabreed 3A............................................................ Jun 02 10,000 106.1 Tabreed 3B ............................................................ Mar 03 10,000 87.1 Tabreed 4............................................................... Mar 03 10,000 102.9 Tabreed 6............................................................... Mar 06 6,000 73.0 TW-01.................................................................... Apr 02 4,000 45.9 Phoenix 1 & 2........................................................ Feb 05 19,050 180.6 Zayed Sports City.................................................. Jul 03 7,600 90.1 Muroor St. (incl. expansion)* ............................... Jul 03 & Aug 05 15,100 111.0 AL-03..................................................................... Oct 05 7,200 83.0 Total Military 102,750 1,034.4 Commercial & Government plants: Al Manar Mall (RAK).......................................... Dec 00 2,500 20.0 Al Ain (incl. expansion) ........................................ Jan 02 & Jan 04 5,000 42.2 Sh Zayed Road (Dubai) ........................................ Oct 02 7,400 82.8 UWEC** ............................................................... Jul 03 2,800 19.7 Marina Mall .......................................................... Mar 06 14,150 110.0 Total Commercial & Government......................... 31,850 274.7 Grand Total........................................................... 134,600 1,309.1 * Has non-military customers as well ** Planned to be transferred to the customer in late 2006 Tabreed has experienced a steady diversification of its customer base, with the majority of new contracts being signed with private commercial customers and other government authorities. 54
Contractual Overview Contracts for Provision of Chilled Water Before building any new project, Tabreed secures a long-term (usually 20 years) off-take agreement with a creditworthy ‘‘anchor’’ customer. Financing is arranged on the strength of the off-take agreement. Tabreed’s business derives stability and sustainability from long-term customer contracts. This enables commitment of plant capacity over the asset life, which is essential in a capital intensive business. Customers are charged a fixed periodic (usually monthly) charge for the availability and maintenance of the system (the ‘‘Capacity Charge’’) plus a variable charge based on units of consumption (the ‘‘Consumption Charge’’). The Capacity Charge is set by reference to the investment in constructing the plant, fixed costs incurred in operating the plant plus a target return on investment. It is subject to inflation adjustments. The Consumption Charge is set by reference to the variable costs incurred to produce the volumes of refrigeration tons consumed. In some cases the Consumption Charge is subject to a minimum amount. Tabreed is not exposed to changes in gas, electricity and water costs and most other costs incurred in relation to materials used for cooling as changes in these costs result in changes to the Consumption Charge and are, therefore, passed through to customers. Customers may or may not have to pay for connection to the system, but do have to pay for any structural changes required to their own buildings to enable these buildings to accept district cooling. Customers are invoiced on a monthly basis and payment is made by the customer mostly by bank transfer. Consumption is measured by sophisticated measuring systems that monitor the flow of water and supply and return temperature. From this data, the amount of energy used is calculated in BTUs and converted into ton-hours. The metering systems are read monthly. Customers are billed in accordance with the meter readings and the terms of the relevant contract. Failure to provide a continuous service for more than a 24 hour period results in a pro rata adjustment to the applicable Capacity Charge based on the amount of time during which service was not provided. Tabreed has the right under its commercial contracts to stop the supply of chilled water in the event of late payment by the customer. Key provisions of a typical cooling services agreement of Tabreed are: * An initial term of 20 years; * On expiry of the initial term, the agreement is automatically extended and continued until either party delivers a notice of termination; * Cooling capacity to be committed; * Customer’s obligations including setting up facilities like piping in its premises to receive and utilise district cooling services; * Company’s obligations including setting up the central chilling plant and delivering the chilled water to the customer at the agreed point of delivery; * Details of charges including Capacity Charge (an annual fixed charge per unit of capacity) and Consumption Charge; * Provision to increase Capacity Charge, linked to the inflation rate; and * Provision to increase the Consumption Charge based on changes in prices of basic inputs. Advantages associated with long-term contracts include: * Stability of off-take; * Commitment of customers before capacity is installed; * Stability with respect to inflation and related cost escalation factors; and * Overall reduction in market risk in a highly capital intensive business. The sole customer of plants built for military bases is the UAF. Contracts with the UAF have a lower Capacity Charge than commercial contracts, but a minimum consumption level is specified. The terms for service provision (rates, minimum consumption, etc.) for all plants built by Tabreed for the UAF are set out in one master contract. Tabreed’s contract with the UAF and its commercial contracts typically provide for an initial term of 20 years from the date of the commencement of service and, thereafter, are terminable by either party 55
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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 and 20: Legionnaire’s Disease Tabreed is
Page 21 and 22: Enforcement of Liabilities Ultimate
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: Detailed customer profile of plants
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
Page 71 and 72: THE UNITED ARAB EMIRATES The UAE is
Page 73 and 74: The growth of Dubai began in the ea
Page 75 and 76: Saudi Arabia Any investor in the Ki
Page 77 and 78: GENERAL INFORMATION 1. It is expect
Page 79 and 80: FINANCIAL INFORMATION AED Interim C
Page 81 and 82: ERNST &YOUNG P.O. Box 136 11th Floo
Page 83 and 84: NATIONAL CENTRAL COOLING COMPANY (P
Page 91 and 92: ERNST &YOUNG P.O. Box 136 11th Floo
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NATIONAL CENTRAL COOLING COMPANY (P
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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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