Saudi Arabia’s sovereign wealth fund bought a 30% stake in a district cooling provider in a deal that Bloomberg reported is valued at about $250 million.
(Bloomberg) —
Saudi Arabia’s sovereign wealth fund bought a 30% stake in a district cooling provider in a deal that Bloomberg reported is valued at about $250 million.
The Public Investment Fund acquired the holding in Saudi Tabreed, the local venture of United Arab Emirates-listed National Central Cooling Co., via a private placement of shares, according to a statement on Wednesday.
National Central Cooling Co., also known as Tabreed, also bought additional shares in Saudi Tabreed from Al Mutlaq Group for 54.6 million riyals ($14.5 million). Tabreed now holds 21.8% stake in its Saudi affiliate.
The deal also gives the PIF, as the wealth fund is known, a significant holding in the district cooling company ahead of an initial public offering in the next two-to-three years, Bloomberg reported on Tuesday, citing people familiar with the matter.
Shares in Tabreed surged as much as 12% in Dubai before closing 10% higher on Tuesday. They were trading down 2.2% at 10:18 a.m. local time on Wednesday.
The PIF is a key part of Crown Prince Mohammed Bin Salman’s plans to wean the kingdom’s economy off its reliance on oil. In recent years, the fund has rapidly expanded to control over $600 billion of assets across the globe and now holds stakes in Lucid Motors and Uber Technologies. In Saudi Arabia, it controls most of the country’s largest companies such as Saudi National Bank and Saudi Telecom Co.
Saudi Tabreed provides centralized cooling systems for urban buildings. The Middle East, where temperatures often soar above 110 degrees Fahrenheit (43 Celsius) during the summer, is the biggest market for such cooling systems. Saudi Tabreed operates a current-contracted capacity of about 751,000 tons of refrigeration, according to its website.
The company already has close ties to the PIF, with agreements to provide cooling for the fund’s Red Sea tourism project and an entertainment district close to Riyadh called Qiddiya.
–With assistance from Farah Elbahrawy and Shaji Mathew.
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