Cytonn Investments CEO Edwin Dande with chief investment officer Elizabeth Nkukuu at a past function in Nairobi. FILE
Cytonn Investments has paid Sh220 million owed to Finnish PE firm Taaleritehdas Private Equity Funds (TTA), giving the fund what Cytton said is a return of 54 per cent on the short-term debt.
Cytonn chief investment officer Elizabeth Nkukuu said the Sh220 million payment is inclusive of total returns due to the Finnish firm.
The note was part of the Sh1.4 billion Cytonn raised in September from local and foreign investors in a private placement to fund its real estate projects.
The debt was used as bridging financing for some of the firm’s real estate projects. Payment of such notes usually indicates that the borrower has secured longer-term financing from financial institutions at lower interest rates.
“The note was structured at a market rate cost of funds of 18 per cent plus participation in the capital appreciation achieved during the period the note was outstanding, bringing the total annualised return earned by TTA to 54 per cent,” said Ms Nkukuu in a statement.
“TTA has financed over Sh2 billion of Cytonn projects and we are very glad to have demonstrated to them our capabilities in structured financing and commitment to our financiers by starting to return some of that capital in less than a year.”
The two firms are partnering in real-estate projects, including the high-end Amara Ridge in Karen worth Sh1 billion.
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