* Buys Palm Utilities from Istithmar World
* Latest intra-emirate M&A deal for Dubai
* Part of trend to help debt-laden state firms
* Cash being transferred from stronger entities
* Empower signed loan facility with big banks for deal
By Matt Smith and David French
DUBAI, Jan 19 Dubai district cooling firm
Empower bought Palm Utilities from a unit of Dubai World
for $500 million on Sunday, part of a shuffle of
assets between companies ultimately owned by Dubai's government
or the emirate's ruler.
Acquiring Palm Utilities, which includes Palm District
Cooling, will give Empower about 70 percent of the United Arab
Emirates' district cooling market, a company statement said.
District cooling is a centralised system for chilling large
buildings, such as offices, factories and tower blocks, instead
of having a large number of individual air conditioning units.
Empower will immediately take over all operations, assets
and liabilities of Palm Utilities, which was previously owned
and operated by Istithmar World.
A joint venture between Dubai Electricity and Water
Authority and Dubai Technology and Media Free Zone
(TECOM) Investments, Empower will fund the purchase through
internal cash, debt and equity financing, the statement added.
Empower signed a $600 million, six-year loan facility with
four banks - Citigroup, Emirates NBD, Mashreq
and Standard Chartered - to fund its
acquisition at the end of last year, according to Thomson
Istithmar World is part of government-owned Dubai World,
while TECOM is part of Dubai Holding, the investment vehicle of
The sale adds to a series of disposals by Dubai World, which
had promised to sell non-core assets under a $25 billion debt
restructuring plan drawn up after 2009, when the group fell
victim to a property market crash and the after-effects of the
global financial crisis.
In 2013, these disposals included British-based logistics
warehouse developer Gazeley and Miami Beach's landmark
Fontainebleau hotel, originally owned by Economic Zones World
and Istithmar World respectively.
Dubai has been juggling assets between its state-linked
firms to allow cash to be transferred from stronger entities to
debt-laden ones such as Istithmar. The emirate faces a heavy
schedule of debt maturities in the next three years, including
the first repayment under Dubai World's restructuring plan,
worth $4.4 billion and due in May 2015; in total, the Dubai
government and related entities have roughly $50 billion of
obligations coming due between 2014 and 2016.
Last month, Istithmar sold the Atlantis resort, which sits
at the top of a palm tree-shaped island in the Gulf, for an
undisclosed sum to Investment Corp of Dubai, a holding company
which controls some of the emirate's top firms.
(Editing by Andrew Torchia)