CAIRO: Cairo-based private equity firm Citadel Capital announced $4.5 million in Q1 net losses on revenues of $2.7 million, with new ventures into new equity investments worth $15 million.
Losses for the same time last year were only at $0.25 million. This year however, due to economic problems following Egypt’s January 25 Revolution, their losses widened substantially.
The firm also announced total assets under management (AUM) for Q1 of 2011 to be at $42.6 million.
The company’s total AUM have been rising 2.5 percent quarter on quarter, while principal investments stood at $916 million (LE 51. billion) at the end of Q1 2011, which was a 2.1 increase from $897.6 from the previous quarter, showing a 10.5 percent growth yearly.
“This post-revolutionary period has not been easy,” Citadel Capital Chairman and Founder Ahmed Heikal said in a statement posted on their website.
“Citadel Capital is still in a cash-preservation posture, our previously planned IPOs remain postponed, and we continue to expect lower-than-usual fund raising momentum for the balance of the year.”
The company’s Q1 ventures included the first commercial wheat harvest in Sudan’s Wafra city, the Nile Valley Petroleum Ltd. Farm-out agreement, and a $25.5 million agreement with the International Finance Corporation (IFC) to finalize completion of Grandview, the firm’s mid-cap investment fund.
According to Heikal, there were several events that occurred in the past months, which gave the company reason to “ask whether cautious optimism may be in order.”
Among these developments is the removal of Heikal’s name from the list of individuals prohibited from traveling outside of Egypt, the company’s receipt of a “comfort letter” from the petroleum ministry for the Egyptian Refining Company, and the company’s ranking as the largest private equity firm in Africa for the third year.
Just two months ago in early April, Citadel Capital’s index plunged in the stock market as Egypt’s Prosecutor General released a statement banning Heikal from travel due to investigations for alleged business deals with former Egyptian prime minister Atef Ebeid, Both were accused of involvement in embezzlement of public money and profiteering.
Just last Thursday, the firm convened and approved a rights issue of up to $175 million in order to boost their balance sheets during these murky times in the country’s economic and political policies.
The company announced their meeting just after the Egyptian Financial Supervisory Authority (EFSA)’s decision to approve the call for an EGM meeting specifically to approve the rights issue, according to a statement.
The result would be that all shares Citadel Capital Partners Ltd. is subscribed to would be under a one-year lock-up period.
The rights issue will be in effect two months from the date it was approved, according to the firm’s statement.
