Ilam Fahari Ireit Announces Redemption Offer Closure

Oct 6, 2023 - 15:46

(L-R) ILAM Fahari I-REIT CEO Raphael Mwito, Dyer and Blair Investment Bank Director Cynthia Mbaru, and ILAM CEO Einstein Kihanda during a media briefing on the proposed conversion of ILAM Fahari I-REIT from an unrestricted I-REIT into a restricted I-REIT.

Nairobi,

Friday October 6, 2023

KNA by Michael Omondi

Listed real estate investment trust ILAM Fahari Real Estate Investment Trust (NSE: FAHR), redemption offer ended Thursday with a preliminary positive subscription outlook.

Speaking when he confirmed the ongoing redemption offer period which paves the way for the conversion process, ICEA LION Asset Management (ILAM) Chief Executive Officer Mr. Einstein Kihanda confirmed that following the closure, the trading of the ILAM Fahari I-REIT will be temporarily suspended from trading at the Nairobi Securities Exchange (NSE) from close of trading on Friday 6th October up to Wednesday 25th October in line with the timetable in the Conversion Offering Memorandum and the Public Notice dated 29th August 2023.

The offer which opened 30 days ago had targeted the redemption of up to 36.5 million REIT units currently trading at the NSE from Non-Professional Investors at a redemption offer price of Sh.11 per unit. The redemption offer price represents a premium of more than 82 percent above the trading price as of the announcement date.

“We are pleased with the market’s positive response to the conversion and redemption offer so far, and we encourage all Non-Professional Investors who are considering redeeming their units to do so or top up to reach the Professional Investor threshold before the offer closes on Friday 6th October at 5:00 pm,” said Kihanda.

ICEA LION Asset Management (ILAM) is undertaking a strategic move to reposition ILAM Fahari I-REIT for growth as envisioned when it went public in 2015. The move has been informed by a strategic review that ILAM undertook in 2021 which sought to understand the challenges the I-REIT faced and develop strategies to improve the returns and market performance.

“The redemption offer is pivotal to our ongoing operational restructuring plan aimed at ensuring the REIT's sustainability and improving its ability to generate returns for unitholders. It is also an opportunity for unitholders whose unit value is less than Sh. 5 million to exit the REIT at a premium to the current market price,” ILAM Fahari I-REIT CEO Raphael Mwito observed.

ILAM received regulatory approval from the Capital Markets Authority (CMA) to convert its unrestricted ILAM Fahari Income Real Estate Investment Trust into a restricted I-REIT. As part of the offer, Non-Professional Investors also have the option to top up to the Sh. 5 million professional investor threshold as prescribed by regulatory provisions or opt to be bundled under a nominee account holding all non-professional investors.

Further, the REIT Manager has set up the bundled nominee account specifically to cater to Non-Professional Investors who are not able to exit during the transaction period or do not wish to take up the redemption offer, granting them continued participation in the REIT's growth.

“The REIT Trustee will review all redemption applications, and the unitholders who have successfully redeemed their units will be paid on 24th October 2023, after reconciliation of the transaction,” added Mwito.

ILAM Fahari I-REIT's portfolio includes four real estate properties: Greenspan Mall, Highway House, a three-story industrial building off Mombasa Road, and 67 Gitanga Place.

For more information on the redemption offer, concerned parties are advised to visit the ILAM Fahari I-REIT website at https://ilamfahariireit.com or contact their investment banker or stock broker.

Courtesy; KNA