KINGS PROPERTIES CEO MAJ (RTD) DAVID KARAU AT HIS OFFICE. PHOTO | DIANA NGILA | NMG
House builder Kings Pride seeks Sh45bn from US equity firm
One of Kenya’s largest real estate firm Kings Pride Properties has opened talks with an American company for a Sh45 billion equity-cum-debt injection.
Group chief executive Major (Rtd) David Karau and director George Fundi who returned from the US yesterday confirmed signing a financing term sheet with the New York-based private equity firm, Milost Global Incorporated last Friday.
(GLOBE NEWSWIRE) — Kings Pride Properties Limited, a Nairobi based real estate development and investment company, announced today that it has signed a financing term sheet of USD$450 million with Milost Global Inc, a New York based Private Equity Firm. This is a working capital and development facility for the company which is being provided as a combo of Debt and Equity, of which $150 million will be an equity facility and $300 million will be debt facility. Both the company and the investor are expected to sign a commitment letter by November 16th 2017.
The Chief Executive Officer of Kings Pride Properties Limited, Maj (Rtd) David Karau, stated, “The best Solution the company has garnered this last quarter of 2017 is this key Partnership with Milost Global Inc. Players in our market know how securing financing locally has taken a twist and became very scarce and expensive. This went all the way into project execution lacking the business charisma expected by the market more so low ROI as well as unaffordability by the end user. We opened our finance and investments doors for this strategic partnership and we hope it comes in as a solution to our property development agenda.”
The Senior Partner & President of Milost Global Africa, Solly Asibey, stated, “The wealth of knowledge, track record and growth strategy of Kings Pride with regards to the real estate development market in Kenya has endeared Milost to partner with them. Our aim is to help grow Kings Pride into a formidable company in the East African region, whilst creating value for all our stakeholders in the process.”
Milost, which confirmed the plan on its website, manages about Sh2.5 trillion.
It usually targets majority stake buyouts in firms dealing in technology, transport, education, distribution, mining, financial services, healthcare, pharmaceuticals, real estate, alternative energy, infrastructure development, oil and gas.
“It is too early to discuss the contents of the deal that is at the onset,” said Mr Fundi.
Once the deal is finalised, Milocast will invest Sh15 billion in equity while the rest will be a debt to fund various Kings Pride projects currently under execution.
Mr Karau described the deal as the best solution saying Kenya’s real estate sector had suffered major setbacks due to unavailable of credit that made development loans costly forcing developers to pass on the same to house buyers.
Milost Africa president and senior Partner Solly Asibey said they were convinced the Kenyan firm’s portfolio was a good investment. Its global president Bernard Yaw said Kenya’s consistently solid GDP growth of 5.3 per cent to 5.9 per cent for the last six years as well as increased foreign direct investments confirmed Kenya was too ‘attractive’ a market to ignore.
The two executives noted the 1.8 million housing deficit presented Kings Pride with a huge market adding they would make Kenya the regional hub as they plan to expand to other markets.
Kings Pride has built 500 housing units to date, mainly targeting high-end clients.
Source: Daily Nation