Grit Real Estate Income Group, a London listed firm has issued a bond to raise up to $31.5 million to acquire, expand and redevelop the Orbit Africa warehousing and manufacturing facility in Nairobi, Kenya, on a sale and leaseback basis.
The funding was secured from Mezzanine Partners GP Proprietary Limited and BluePeak Private Capital with backing from an IFC debt facility.
“The total purchase consideration of USD 53.6 million will be settled by way of USD 25 million in senior debt finance negotiated with the International Finance Corporation, a member of the World Bank Group, and USD 28.6 million through the perpetual note issuance,” a statement issued read.
Orbit Products Africa Limited (Opal), is the contract manufacturer in Kenya for Reckitt, Colgate-Palmolive and Unilever is owned by brothers Sachen and Dirchen Chandaria.
However, the Chandaria firm’s manufacturing will continue on the same site, with Opal having agreed to a new 25-year lease on the same premises, with an option for a further 10 years.
“This innovative sale and leaseback transaction is amongst the largest across the sub-continent, with the strategic partnership with Grit representing a significant long-term undertaking by Orbit and reaffirms our commitment to Kenya and the region. Proceeds from the transaction will substantially further strengthen our balance sheet,” Chandaria said.
Grit chief executive Bronwyn Knight said in a statement the Orbit sale and leaseback transaction and facilities upgrade meets all Grit’s investment criteria.
This includes an attractive yield, net asset value accretive from inception, located in a prime position and in a high-growth sector with exceptional counterparties.