Cytonn Loans: Cytonn Investments has inked a Sh. 650 million loan deal. The investment firm signed the deal with SBM Bank Kenya.
Following the deal, the loan will be dedicated towards completion of Cytonn’s Alma project, which is a mixed development featuring 477 residences and commercial blocks. The project is located in the upmarket Ruaka area in Kiambu.
“In terms of diversity of funding, it’s important for a real estate player. We are going to do this (bank financing) more and more,” said Edwin Dande, the chief executive officer of Cytonn. “This loan demonstrates that there are good brands that have looked at our strategy and are comfortable. We will be talking to other banks so that we will have around 50 percent of our capital structure being bank funding.”
According to a related report in the Business Daily, the long-term capital raising strategy, he said, is to gradually cut the share of mezzanine finance (a hybrid of debt and equity funds) in the firm’s capital structure to 30 percent from 50 percent while growing bank financing to 50 percent with the remainder being equity.
“The growth-hungry firm, largely focused on upmarket and mid-income real estate developments, says it has so far raised Sh. 22 billion with most of it coming from high-net worth individuals, institutional investors and joint ventures,” says the report.