Citadel completes rights issue
Egyptian private equity firm Citadel Capital announced today in a media statement that shareholders have fully subscribed to its EGP1.05 billion ($175.6 million) capital increase, adding EGP718 million ($120 million) in fresh cash to its balance sheet.
The announcement comes at the close of the second and final subscription period for a rights issue approved by shareholders and Egyptian regulators in August 2011.
“The successful close of our capital increase despite challenging global and local market conditions is ringing endorsement from key shareholders of Citadel Capital’s long-term fundamentals,” noted Ahmed Heikal, the firm’s founder-chairman.
“Notably, our long-term Gulf investors strongly backed Citadel Capital during this rights issue. In addition, leading international institutional investors — including Western and regional funds — subscribed to Citadel Capital,” he said.
The rights issue saw shareholders subscribe to 210 million new shares (including 52.5 million preferred shares) at a par value of EGP5 each. The firm now reports capital of EGP4,358,125,000 distributed across 871,625,000 shares, including 217,906,250 preferred shares and 653,718,750 common shares.
“This is the first of several steps that we expect will add an additional $200 million to our war chest by the end of the year, putting Citadel Capital in a robust financial position heading into 2012. We see this as opportunity capital: It is more than sufficient to ensure our 19 existing platform companies weather any additional economic headwinds – and in the event of an improving business climate, it provides us with the flexibility to more rapidly grow our existing portfolio or to pursue compelling new opportunities of multiple forms. Throughout, we will remain very cautious,” Heikal noted.
In addition, Citadel Capital and its platform companies have raised a further $319.3 million in equity and debt since January 2011 despite ongoing regional tensions. The firm continues to enjoy the unqualified support of leading international financial institutions including the International Finance Corporation, the African Development Bank, IFC African, Latin American and Caribbean Fund ALAC, Dutch development bank FMO, German development finance institution DEG, the European Investment Bank, France’s PROPARCO, Germany’s KfW Entwicklungsbank, Belgium’s BIO, Equity Bank of Kenya and the ICF Debt Pool, all of whom have joined leading regional LPs in participating in Citadel Capital transactions this year.
“We see a further 12-18 months of turbulence ahead, a fact that sees us continue to manage costs at the platform and portfolio levels. That said, we are optimistic: Our investments are firmly on the right side of macroeconomic trends, and we remain resolute in our belief that greater democracy in key nations across our footprint will only enhance the outstanding macroeconomic fundamentals that short-term investors are presently discounting,” Heikal concluded.