ILAM Fahari Income Real Estate Investment Trust has received applications for redemption of 41,371,604 units against 36,585,134 Units on offer, which represents a subscription rate of 113.08 per cent.
During the period the REIT also received application for top up of additional units of 421,945 from Non-Professional Investors.
ICEA LION Asset Management (ILAM) Chief Executive Officer Einstein Kihanda said the offer had received redemption applications from non-professional investors wishing to redeem up to 36,585,134 Units currently listed at the NSE, offered at a premium of more than 82 per cent over the trading price as at the offer announcement date.
ILAM has been working to restructure the REIT to ensure its sustainability and improve its ability to generate returns for unit holders. A recent strategic review recommended undertaking an operational restructuring plan, which paved the way for this transaction.
“This transaction provides a viable path to restructure the REIT. We are clear that the REIT needs to grow substantially in size to achieve economies of scale, which can only be done by acquiring additional assets,” Kihanda said.
“Following the close of the offer period, ILAM, in consultation with the respective transaction advisers, has provided the offering results to the Capital Markets Authority. The results indicate that the offer received a positive response with more than 13.08 per cent above the target number of units,” Kihanda said.
He added, “With the outcome, we are now on course to complete the redemption process and proceed to the strategic restructuring of the ILAM Fahari I-REIT as we seek to position it for growth. The next step will be the Extra-Ordinary General Meeting in November. This is part of our strategic growth plans to deliver positive returns for our investors while deepening the local capital markets.”
The ILAM Fahari I-REIT Kshs 402 million month-long offer that opened slightly over a month ago (Wednesday, September 6 and closed on Friday, October 6 2023) sought to redeem up to 36,585,134 units equaling to 20.22 per cent of the issued shares of the ILAM Fahari I-REIT as part of an operational restructuring effort.
As part of the offer, the target unit holders had an opportunity to either redeem their units at a Redemption Offer Price of Kshs 11 per unit, top up to the Kshs 5 million professional investors threshold as prescribed by regulatory provisions or opt to be bundled under a nominee account holding all non-professional investors who failed to take up the redemption offer.
The Transaction has resulted in ICEA LION Asset Management Limited increasing its unitholding to 22.74% post-redemption.