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Restructuring an Insolvent Business – Case Study of Nakumatt Holdings

Mar 25, 2018

This week’s focus note is on restructuring, given the ongoing restructuring of Nakumatt Holdings. Business restructuring refers to a process of re-organizing a company’s ownership, operational and capital structure in order to make a company more profitable or come out of insolvency. The need for corporate restructuring arises because of the change in a company’s ownership structure due to a merger or takeover, adverse economic conditions, or adverse changes in the business such as bankruptcy or buyouts. Corporate restructuring may include changes in the asset structure, liability structure or both of them, thus simultaneously reducing tensions between debt and equity holders to facilitate a prompt resolution in case the company is in a distressed situation. A business is insolvent when its liabilities exceed its assets. However, in practice, insolvency comes about when a business cannot raise enough funds to meet its obligations, or pay debts as an...

Dar es Salaam Real Estate Investment Opportunity

Mar 18, 2018

In a bid to offer a diversified investment portfolio to our clients, Cytonn has been conducting comprehensive studies in various markets across Africa in our key focus areas of real estate, banking, education, and hospitality. We have so far released the following reports: Kampala Real Estate Investment Opportunity in September 2017, Accra Real Estate Investment Opportunity in November 2017, Sub-Saharan Africa Financial Services Report in November 2017, Kigali Rwanda Real Estate Report in February 2018. This week, we turn our focus to Tanzania with a focus o...

Nairobi Commercial Office Report 2018

Mar 11, 2018

In 2017, we released our Nairobi Commercial Office Report - 2017, which covered the performance of the office sector in Nairobi in 2016. According to the report, the commercial office sector was transitioning to a buyers’ market due to an oversupply of space that stood at 2.9 mn SQFT in 2016, expected to reach 3.2 mn SQFT in 2017. Rental yields had stagnated at 2015 levels of 9.3%, and occupancy rates reduced by 1.0% points to come in at 88.0% in 2016 from 89.0% in 2015. However, we noted that the commercial office theme had pockets of value in differentiated concepts such as Mixed-Use Developments (MUDs), serviced offices and also in Kenyan Counties due to devolution. This week, we update that report with our Nairobi Commercial Office Report - 2018. The report highlights the performance of the office sector in 2017, based on rental yields, prices, occupancy rates, demand and s...

Update on Kigali Real Estate Investment Opportunity

Feb 25, 2018

Following Kampala Investment Opportunity research report, Sub Saharan Africa Financial Services Report and  Accra real estate investment research report, we continue to assess investments opportunities in the region, in our key focus areas of Real Estate, Banking, Education, Hospitality, and Technology to enable us  diversify our portfolio of investments and product range to our clients. In line with this strategy, we continue to conduct comprehensive research of various regional markets in Sub Saharan Africa. This report is an update to the 2016 Kigali market research with the 2018 data. Rwanda is one of the fast-growing countries in Africa at a GDP growth rate e...

Kenya’s Public Debt, Should We Be Concerned

Feb 18, 2018

Over the last few years, Kenya’s rising public debt has been a point of discussion in most macroeconomic outlook discussions, with organizations such as the World Bank, the International Monetary Fund (IMF), global credit rating agencies (Moody’s Credit Rating Agency, S&P Global Ratings, and Fitch Ratings) and the African Development Bank (AfDB), among others, raising concerns. Most recently, on 14th February 2018, Moody’s downgraded the government’s issuer rating to “B2” from “B1” previously, based on the observation that as the country’s financing needs continue to grow and the government turns to external commercial loans to fund the deficit, more pressure is likely to mount on the government’s liquidity and therefore ability to repay arising liabilities in good time. The credit rating agency however retained a “stable” outlook supported by Kenya’s strong and relatively diversified economy. The National Treasury however refuted the rating, claiming the analysis was...