Citadel Capital Raises US$ 767.9 mn in International Third-Party Cash in FY 2011, Reports 63.1% Narrowing of Standalone Loss to US$ 18.3 mn

Leading private equity firm in Middle East and Africa reports exceptional fundraising momentum despite regional and global challenges, with an 8.7% rise year-on-year in total investments under control to US$ 9.5 billion and a 6.3% rise in assets under management to US$ 4.3 billion. Firm also reports narrowing of both standalone and consolidated loss as it releases full year 2011 business review

Citadel Capital (CCAP.CA on the Egyptian Stock Exchange), the leading private equity firm in the Middle East and Africa, reported an 8.7% year-on-year rise in total investments under control to US$ 9.5 billion (EGP 57.1 billion) and a 6.3% rise in assets under management (AUM) to US$ 4.3 billion (EGP 25.8 billion) as it announced today its financial results for fiscal year 2011.

In the year ending 31 December 2011, and despite the prevailing economic turmoil regionally and globally, Citadel Capital added US$ 761.1 million (EGP 4.6 billion) in new investments under control. Included in that figure is US$ 256.2 million (EGP 1.5 billion) in new AUM and US$ 504.9 million (EGP 3.0 billion) in new debt.*

“Despite substantial headwinds from the economic fallout attendant to the Revolution, we raised nearly three-quarters of a billion dollars in new equity and debt for our investments, decisively shored up our balance sheet at the Citadel Capital level, implemented decisive cash preservation measures, and undertook a program of closer operational oversight of our platform and portfolio companies,” said Citadel Capital Chairman and Founder Ahmed Heikal.

“Our success on these fronts sees us enter 2012 on a strong footing as we look to rebalance our portfolio through the divestiture of non-core assets, freeing capital to fuel growth at our core investments,” he noted.

Also in 2011, Citadel Capital’s principal investments in its own transactions rose 8.9% to US$ 941.0 million (EGP 5.4 billion), while the firm added a further US$ 325.6 million to its balance sheet through a US$ 175.6 million capital increase and US$ 150 million in new debt guaranteed by the US Overseas Private Investment Corporation. Drawdown on the OPIC funds took place in 1Q12.

The firm has also completed the refinancing of its pre-existing US$ 175 million debt facility to better suit the planned pace and tenor of its investments.

“Citadel Capital’s priority for 2012 is to maximize growth of our core platform and portfolio companies. We have secured new investment and debt for key investments including Rift Valley Railways in Kenya and Uganda, Sudan and South Sudan agriculture play Wafra, and Nile Logistics in Egypt, among others. Our emphasis in the coming months is thus on financial close for the Egyptian Refining Company, finalizing regulatory procedures for fuel bunkering platform Mashreq, obtaining the building permit for our 3.5 MTPA cement plant in Algeria, inaugurating our 2 MTPA cement facility in Egypt, completing the turnaround of NOPC / Rally Energy, closing the sale of National Petroleum Company Egypt, and reducing execution risk across our portfolio,” Heikal said.

With no exits in the year, Citadel Capital reports a standalone net loss of US$ 18.3 million (EGP 110.1 million) for 2011 on revenues of US$ 11.6 million (EGP 69.5 million) compared with a net loss of US$ 49.7 million (EGP 298.3 million) the previous year.

The narrowing loss came in part on the back of an 11.7% reduction in spending on operating expenses as part of an ongoing program of cash preservation and cost control. Notably, the firm reduced recurring OPEX by 19.4% in 2011. Further OPEX reductions are expected in FY12.

On a consolidated basis, the firm reported a consolidated net loss of US$ 133.3 million (EGP 800.5 million) against a loss in FY10 of US$ 226.4 million (EGP 1,360.2 million) stemming largely from non-cash write-downs of previously impaired upstream oil and gas investment NPC, non-cash expenses related to the clean-up of investments at the portfolio-company level at other platforms, as well as non-cash foreign exchange losses related to investments in Sudan.

Meanwhile, the portfolio net asset valuation (PNAV) of Citadel Capital’s principal investments in its own transactions at the end of 2011 stood at US$ 861.1 million (EGP 5,172.7 million) according to an independent valuation prepared by RisCura, a provider of valuation, risk and performance analysis with a specialization in Africa.

Management believes that use of a PNAV calculated by an independent third party ensures that all parties — shareholders, limited partners, co-investors and lenders — enjoy access to a PNAV prepared according to a consistent methodology and that accurately reflects reality.

PNAV per share (PNAVPS) stood at US$ 0.99 (EGP 5.93) as at 31 December 2011.

Highlights of the year’s fundraising include US$ 767.9 million (EGP 4.6 billion) in third-party cash raised at both the platform and Citadel Capital levels, largely from development finance institutions:

 

Total Third-Party Cash Raised in 2011 (in US$ mn)
Total Equity Raised and Drawn from Co-Investors in 2011 and early 2012 82.9
Africa Railways (ALAC, FMO, DEG, PROPARCO, IFC) 35.0
Nile Logistics (DEG, EIB) 21.2
Others 26.7
Additional Equity Raised but Undrawn in 2011 and early 2012 45.0
Africa Railways (ALAC, FMO, DEG, PROPARCO, IFC) 35.0
Grandview for Shorouk Paper Mill (IFC)
(not included in Citadel Capital’s AUM base)
10.0
New Platform-Level Debt in 2011 and early 2012 370.0
Africa Railways (IFC ALAC, FMO, DEG, FISEA, IFC) 164.0
Wafra 24.0
Grandview for Shorouk Paper Mill (IFC)
(not included in Citadel Capital’s AUM base)
15.0
Others 167.0
Proceeds from Citadel Capital-level Rights Issue
(Cash component only)
120.0
US Overseas Private Investment Corporation Facility 150.0
Total Third Party Cash Raised in 2011 767.9

 

“Fundraising on this scale despite the prevailing political and economic circumstances, while at the same time nurturing growth plans for core investments and planning the rebalancing of our portfolio, is a clear and public endorsement of the soundness of our portfolio and of our investment fundamentals,” Heikal said. “The road ahead in 2012-13 will include challenges, but also substantial opportunities for an investment firm that is soundly on the right side of macro fundamentals including high commodity prices, energy deregulation, exports (and import substitutes), and businesses with hard-currency revenue streams outside of Egypt.

“Against this backdrop, we look forward to delivering strong results in 2012 as we nurture investments that proudly employ more than 45,000 people across our 15-country footprint,” Heikal concluded.

Management’s discussion of operations and details of Citadel Capital’s 4Q and FY11 standalone and consolidated financials and full financials are available for download at citadelcapital.com.

*Total third party funds raised is the total money raised in 2011 from third parties including third party funds raised on the Citadel Capital level during the capital increase. Investments under control are the actual invested or committed funds on the platform company level.

—Ends—

Citadel Capital (CCAP.CA on the Egyptian Stock Exchange) is the leading private equity firm in the Middle East and Africa. Citadel Capital focuses on building regional platforms in select industries through acquisitions, turnarounds, and greenfields executed via Opportunity-Specific Funds. The firm’s 19 OSFs control Platform Companies with investments of US$ 9.0 billion in 15 countries spanning 15 industries, including mining, cement, transportation, food and energy. Since 2004, Citadel Capital has generated more than US$ 2.2 billion in cash returns to its co-investors and shareholders (on investments of US$ 650 million), more than any other private equity firm in the region. Citadel Capital is the largest private equity firm in Africa by PE assets under management (2006-2011, as ranked by Private Equity International). For more information, please visit www.citadelcapital.com.

For more information, please contact:
Ms. Ghada Hammouda
Head of Corporate Communications
Citadel Capital (S.A.E.)

g...@qalaaholdings.com (click to reveal this email)

Tel: +20 2 2791-4440
Fax: +20 22 791-4448
Mobile: +20 10 6662-0002