Fusion Capital will fund the Sh2.3 billion mixed-use development in Meru County from privately raised cash and only use debt as a last resort, its chief executive Luke Kinoti has said.
This comes after the company achieved only 38 per cent success rate in a bid to raise the cash through a development real estate investment trust (D-Reit). The loose target was to reach 50 per cent of the overall amount.
The firm raised Sh873.9 million, leaving a gap of Sh1.426 billion. The money came mainly from three insiders (or existing shareholders) as only one outsider subscribed, making a total of four.
The D-Reit will not be listed on the Nairobi Securities Exchange (NSE) since it did not reach the threshold of seven subscribers as prescribed in the Capital Markets Regulations for Reits.
“We will use the money raised even though the D-Reit will not be listed. The company will seek more cash privately. Debt will be a last resort,” said Mr Kinoti on the phone.
The company though said it would also engage the bourse and the Capital Markets Authority for possible raising of money in the future.
Mr Kinoti said the development in Meru is already under construction at 35 per cent completion, with the apartments already 50 per cent booked while the mall was 25 per cent booked.