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Citadel Capital obtains approval from OPIC for US$150 million facility

The US$150 OPIC financing would give Citadel Capital a total of US$ 325 million (EGP 2.0 billion) of long-term capital.
Qalaa Holdings | 14.11.2011
Leading private equity firm set to accelerate growth of existing platform companies and consider new opportunities as it seeks to add nearly EGP2 billion to its balance sheet with US Overseas Private Investment Corporation (OPIC) facility and recently completed rights issue

Citadel Capital SAE (CCAP.CA on the Egyptian Exchange), the leading private equity firm in the Middle East and Africa with US$ 8.7 billion in investments under control, received formal Board approval for a new ten-year, US$ 150 million (EGP 900 million) financing facility from the United States Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution. Of the total amount, $125 million is specifically designated for investment in Egypt.

The US$ 150 OPIC financing would, if added to the proceeds from the firm’s fully-subscribed US$ 175.6 million (EGP 1.05 billion) rights issue, give Citadel Capital a total of US$ 325 million (EGP 2.0 billion) of long-term capital. The firm also expects to add a further US$ 50 million to its cash balances through a series of small divestitures (rebalancing of its portfolio) over the coming months.

“Our balance sheet is now strong and liquid,” said Citadel Capital Chairman and Founder Ahmed Heikal. “These developments, coming as they do within a few weeks of each other, should put us in a robust financial position heading into the new year. As I have said before, this is opportunity capital: It gives us unprecedented flexibility to grow while simultaneously allowing us the freedom to explore new opportunities within our 19 Platform companies amid any further economic headwinds from still-unfolding regional events. We will, however, remain very cautious.”

“In order to support the economic and political transformation of the Arab Spring, MENA countries need investment in vital sectors – and that’s precisely the goal of this project,” said OPIC President and CEO Elizabeth Littlefield. “It addresses the shortage of credit in Egypt, where investment in important infrastructure sectors has been stymied by political uncertainty. We expect that this project, by catalyzing economic growth and creating jobs, will make an important contribution to the growth of democracy in Egypt.”

This marks the second time in just over one year that OPIC has approved financing for Citadel Capital and its investment opportunities. In July 2010, the firm announced that OPIC had approved a US$ 100 million financing facility for new investments alongside Citadel Capital and the firm’s Africa and MENA Joint Investment Funds (JIFs).

Citadel Capital reached a US$ 140 million first close on the JIFs, its first standard institutional funds, last fall with anchor investments from leading global financial institutions. The firm also continues to raise equity on a transaction-by-transaction basis through its flexible Opportunity-Specific Funds (OSF) model.

Added Hisham El-Khazindar, Managing Director and Co-Founder, “OPIC’s decision to extend finance is an endorsement not just of the fact that our investments remain firmly on the right side of macroeconomic trends, but of the added value Citadel Capital brings to the communities in which we do business. Citadel Capital’s investments are helping refine cleaner-burning fuels, ease road congestion and curb emissions by transporting goods by river and rail, tackle solid waste problems, and ensure food security, among other things.”

In addition to US$ 325 million raised from OPIC and the rights issue, Citadel Capital and its platform companies have raised a further US$ 319.3 million in equity and debt since January 2011 despite ongoing regional tensions.

The firm continues to enjoy the unqualified support of leading international financial institutions including the International Finance Corporation, the African Development Bank, the IFC African, Latin American and Caribbean Fund, Dutch development bank FMO, German development finance institution DEG, the European Investment Bank, France’s PROPARCO, Germany’s KfW Entwicklungsbank, Belgium’s BIO, Equity Bank of Kenya and the ICF Debt Pool, all of whom have joined leading regional co-investors in participating in Citadel Capital transactions this year.