Citadel Capital closes $50m capital increase

In early January 2009, Citadel Capital announced a rights issue of more than 52mi new shares to existing shareholders at a par value of EGP 5 per share to increase the firm's paid-in capital to EGP3.025bn from EGP2.75bn.

"Raising $50m in these economic circumstances is a testament to our shareholders' belief in Citadel Capital's ability to create value. With more than $2.2bn in cash returns to investors to date, we have returned more to investors than any other private equity firm in this region by far."

said Citadel Capital Chairman and Founder Ahmed Heikal.

Heikal explained that the capital increase will add to Citadel Capital's permanent capital base, "allowing us the liquidity to fund expansion plans at a number of our Platform Companies operating in high growth sectors. At the top of our list is funding our activities in Sudan, where we recently secured a 99-year freehold on 254,000 acres of prime farmland. We will also place a priority on directing the proceeds to our Nile River transport projects in Egypt and Sudan and to the Egyptian Refining Company's build-out of a state-of-the art refinery in Cairo's Mostorod district."

Despite the global credit crunch Citadel Capital is also in the final stages of closing on debt to finance strategic expansion projects in a number of its platform companies.

The rights issue is Citadel Capital's fourth capital increase to date. The firm's last increase occurred in May of 2008 and raised the firm's capital to EGP2.75bn from EGP1.65bn.

"2009 will likely be a difficult year for most economies around the globe," Heikal concluded, "but private equity's long term approach benefits from counter cyclical investing where we expand our holdings and build our asset base when prices are reduced."

Citadel Capital's well-funded balance sheet allows it to remain one of only a handful of private equity general partners worldwide to make significant investments in its own transactions. The firm aims to hold a 10 to 20% stake in most investments, with the remaining ownership going to individual or institutional financial investors from Egypt, the Arab world and Europe.