Unitholders vote to reshape ILAM Fahari I-REIT
Today, ILAM Fahari Real Estate Investment Trust, a real estate investment trust listed on the Nairobi Securities Exchange, is convening an Extraordinary General Meeting (EGM) to seek approval from its unitholders for a conversion to a restricted I-REIT.
An earlier notice sent to shareholders has affirmed that the EGM will deliberate on and, if deemed appropriate, endorse resolutions pertaining to the proposed conversion of ILAM Fahari I-REIT from an unrestricted to a restricted I-REIT, along with its subsequent delisting from the NSE.
The planned shift to a restricted I-REIT will empower ILAM and the REIT Trustee to pursue a more targeted investment strategy, aligning closely with the changing requirements of its unitholders.
Delisting from the NSE is intended to offer increased flexibility in managing the REIT’s portfolio, while preserving the unitholders’ ability to trade units, with Non-Professional investors bundled into a Nominee Account. There’s a prospective consideration for relisting on the NSE after three years, contingent on the successful execution of the outlined strategy.
The EGM comes on the heels of a redemption offer for ILAM Fahari I-REIT units in October, which saw an oversubscription of 13.08 percent. Additionally, the REIT received applications from non-professional investors looking to bolster their portfolios with an additional 421,945 units.
Strategic direction
Mr Einstein Kihanda, the CEO of ICEA LION Asset Management (ILAM), noted that the oversubscription of the redemption offer reflects confidence in the envisioned strategic direction. It also underscores the commitment to repositioning the REIT for growth and ensuring value delivery to the unitholders.
“We are confident that the unitholders will support our proposed operational strategic direction. We have engaged with a cross-section of them and assured them that this is the right decision for the future of the REIT. The proposed conversion and delisting will enhance the long-term value of the REIT for our unitholders,” Mr. Kihanda said.
“The EGM is an essential step in our efforts to restructure the operational direction of the REIT in a way that will best serve the long-term interests of all unitholders.”
According to Mr. Raphael Mwito, the CEO of ILAM Fahari I-REIT, the restructure of the REIT will yield multiple advantages for unitholders. These include enhanced flexibility to explore a wider array of investment opportunities, such as direct real estate acquisitions and developments. The restructuring aims to bolster the REIT’s capacity to align its investment strategy with the long-term requirements of its unitholders while concurrently minimizing costs and administrative burdens associated with being a listed REIT.
“We remain steadfast in our pursuit of delivering value and innovation, driving forward a robust and adaptive investment environment. As the day gets close, we will continue providing unitholders with all the information they need to make an informed decision at the upcoming EGM,” Mr Mwito said.
Read also: ILAM FAHARI I-REIT redemption oversubscribed by 13.08 percent
What unitholders are voting for
The unitholders will vote on the following special resolution: The proposed Conversion of The ILAM Fahari I-REIT and delisting from the NSE. These include:
- Approval be and is hereby given for the proposed conversion of the ILAM Fahari I-REIT from an unrestricted to a restricted I-REIT;
- Approval be and is hereby given for the delisting of the ILAM Fahari I-REIT from the Nairobi Securities Exchange (NSE);
- Approval be and is hereby given for the quotation of the ILAM Fahari I-REIT units on the Unquoted Securities Platform (USP) managed by NSE; and
- ICEA LION Asset Management Limited as the manager of the ILAM Fahari I-REIT, (the “Manager”) and The Co-operative Bank of Kenya Limited, in its capacity as the trustee of ILAM Fahari I-REIT (the “Trustee”) be and are hereby severally authorized to complete and do all such acts and things (including executing all such documents as may be required) as the Manager or, as the case may be, the Trustee may consider expedient or necessary or in the interests of the ILAM Fahari I-REIT to give effect to the conversion and delisting.
Unitholders are encouraged to attend the virtual EGM and vote for the proposed conversion and delisting and to vote on the resolutions. Those who are yet to receive the meeting link should contact the REIT Manager through [email protected] the [email protected] or 020 8690360
ILAM Fahari I-REIT has obtained regulatory endorsement from the Capital Markets Authority (CMA) to transform its unrestricted ILAM Fahari Income Real Estate Investment Trust (IFIR) into a restricted I-REIT. This approval follows a cautionary statement issued on March 24, 2022, indicating that the REIT was undergoing a strategic review involving the operational restructuring of IFIR.
ILAM Fahari I-REIT is a real estate investment trust licenced under the REITs regulations that was authorised by the Capital Markets Authority on 30 September 2015, becoming the first REIT in East Africa. It later became listed on the NSE on 26 November 2015, raising capital of Kes3.6 billion.
