Money Markets
By GEORGE NGIGI
In Summary
In a notice to its members, the company indicated that
it would be seeking to raise more capital from shareholders through a
private rights issue offer.
Fountain Enterprise Programme (FEP) Holdings plans to
build 2,039 houses on its 400-acre piece of land in Lukenya. The
investment company intends to construct 600 units in the first phase,
which is expected to be completed in two years.
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“The development will involve construction of 2,039
residential maisonettes and bungalows; establish a community water
supply borehole, a school, a shopping mall, hotel and a hospital,” reads
a statement from the National Environment Management Authority (Nema).
Houses in the first phase are expected to retail at
between Sh5.8 million and Sh12.6 million. FEP is sourcing funds for the
project, which is estimated to cost Sh25 billion. It is already in the
process of raising an additional capital of Sh3 billion from its 30,000
members through various options.
In a notice to its members, the company indicated
that it would be seeking to raise more capital from shareholders through
a private rights issue offer. The proposal is to capitalise Sh812
million, issue bonus shares worth Sh162 million and raise the rest –
Sh2.026 billion – from shareholders.
FEP management, however, said it would not use funds from shareholders on the real estate project dubbed Kisima Park.
“It would be difficult for some of our businesses
to raise capital on their own, but for housing it is easy to get
financiers so long as you give them a plan,” said FEP’s director Chizah
Wambugu.
FEP Group owns a number of companies in real
estate, education, media, leisure and financial services. All have been
growing rapidly over the last decade.
The firm bought the land in Lukenya in 2012 for
over Sh1 billion and has been selling plots, advertised on their
website, at Sh1.3 million for an eighth of an acre. FEP was formed in
2002 and recorded its first profit of Sh17 million after tax in 2012.
Some of its ventures include Fountain Credit Services, which is
undertaking the capital intensive process of converting into a
microfinance bank.
It recently deepened its presence in the
hospitality industry with the completion of Suntec Hotel in Sagana,
which follows the 2012 opening of Kisima Hotel in Karen.
Real estate has proven to be a good bet in Kenya’s
investment market following a more than decade long rally driven by low
supply. The sector has attracted insurance firms such as Britam, Pan
Africa and CIC, investment firms and pension fund managers.
gngigi@ke.nationmedia.com
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