NAIROBI, Kenya, Jan 12 – Centum Real Estate Limited has inked a share subscription facility deal of upto Sh17 billion with GEM Global yield, the Luxembourg-based private alternative investment group for a 36 month term.
The deal will allow the wholly-owned subsidiary of Centum Investment company to draw down funds by issuing shares of common stock to GEM.
Centum’s Managing Director James Mworia said the investment validates the market opportunity pursued by the firm in providing housing in Sub Saharan Africa whose demand is barely met.
“We are quite pleased with this development and look forward to attracting even more investors into Centum Real Estate,” Mworia said.
He added that the provision will enable the firm to achieve its mission of building African enterprises and provide a platform where investors can access them.
The commitment by GEM, he said, is a major vote of confidence in the firm and its business model noting that the investment will go a great way in significantly scaling up the business of the firm.
“The move provides independent market validation of the attractiveness of the firm’s model, demonstrates the depth of investor interest, and helps in strengthening market confidence of the business model,” he added.
Under the agreement, Centum will control the timing and maximum size of the funds with no limited obligation.
The real estate firm is currently developing over 1,400 homes many of which are already completed.
Another 3000 housing units are in the pipeline to be developed in the near term. Additionally, Centum Real Estate holds bulk development rights across its land banks for its future housing development and sale to other developers.
A subscription agreement is a formal agreement between a company and an investor to buy shares of a company at an agreed-upon price.
It contains all the details of such an agreement, including Outstanding Shares, Shares Ownership, and Payouts.
A well organized and well-structured subscription agreement will include the details about the transaction, the number of shares being sold and the price per share, and any legally binding confidentiality agreements and clauses.
GEM, the USD3.4 bn firm has previously provided equity investment in various projects, managing a diverse set of investment vehicles focused on emerging markets across the world.