(Bloomberg) -- Abu Dhabi-based Multiply Group PJSC is considering selling its district cooling division, as it looks to capitalize on the construction boom in the United Arab Emirates.
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The investment firm is working with Standard Chartered Plc on the sale of PAL Cooling Holding, according to people familiar with the matter. The owners are seeking about $1 billion for the unit, the people said, asking not to be named as the information is private.
It’s already drawn interest from regional and international investors, one of the people said. Deliberations are still at an early stage and a sale might not go ahead, the people said.
Representatives for Multiply and StanChart didn’t respond to requests for comment.
Multiply went public more than three years ago and is known for its investments ranging from Getty Images to Rihanna’s lingerie company. Its parent firm, International Holding Co., is led by Sheikh Tahnoon Bin Zayed Al Nahyan, one of the Middle East’s most powerful royals who oversees a $1.5 trillion empire that spans two sovereign funds and several holding firms.
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District cooling is the most prevalent method of air conditioning in a region that has to cope with temperatures that often climb above 110 Fahrenheit (43 Celsius) during the summer. Water that is chilled in plants is transferred through pipes to cool buildings including villas in residential neighborhoods or the many skyscrapers in the UAE. The ongoing construction boom in the country is driving a surge in demand for district cooling.
Founded in 2006, PAL operates five district cooling plants in the country and has partnerships with some of the leading domestic developers.
The sector has been consolidating in recent years, with Tabreed — whose major shareholders include Abu Dhabi sovereign fund Mubadala and France’s Engie SA — buying an 80% stake of Emaar Properties PJSC’s business that provides district cooling to local landmarks such as the Dubai Mall and the Burj Khalifa. Separately, Dubai’s Empower bought the district cooling systems of the emirate’s airport and listed on the local stock exchange.