Citadel raises $50m from shareholders(3)

The proceeds of the firm's fourth rights issue will be used to fund growth opportunities at portfolio companies.

Cairo-headquartered Citadel Capital has raised an additional EGP275 million (€37 million; $50 million) from existing shareholders to take the firm’s paid-in capital to EGP3 billion.

The money was raised through a rights issue of more than 52 million new shares to existing shareholders at a par value of EGP5 per share.

The funds will allow Citadel “the liquidity to fund expansion plans at a number of our platform companies operating in high growth sectors”, chairman and founder Ahmed Heikal said in a statement.

“At the top of our list is funding our activities in Sudan, where we recently secured a 99-year freehold on 254,000 acres of prime farmland. We will also place a priority on directing the proceeds to our Nile River transport projects in Egypt and Sudan and to the Egyptian Refining Company's build-out of a state-of-the art refinery in Cairo's Mostorod district.”   

Citadel also said it was close to securing debt financing for “strategic expansion projects in a number of its platform companies”.

This latest rights issue is the fourth the Middle East and North Africa-focused firm has undertaken. The previous rights issue happened in May 2008 and took the firm’s capital from EGP1.65 billion to EGP2.75 billion.

Citadel is currently raising its first institutional funds, the Citadel Capital Joint Investment Fund, which is targeting $500 million. It has previously raised capital on an as-needed basis for deals.

Acknowledging this was “an extremely, extremely difficult time to raise money”, Heikal told sister website InfrastructurIinvestor.com in February that he expected to hold a first close on this fund in the second quarter of this year.

The fund will aim to make 10 investments in industrial consolidations, distressed and turnaround companies, buyouts and selective greenfield companies in the MENA region.

Citadel, which was founded in 2004 by ex-EFG Hermes stalwarts Heikel and Hisham El Khazindar, was last year mulling plans to become the first private equity firm in the MENA region to publicly list its management company. The firm declined to comment on this at the time.