Cytonn Investment has earned temporal relief as it clears 20 per cent of its obligation to investors under the Cytonn High Yield Solutions (CHYS) and Cytonn Project Notes (CPN).
This is as part of the investors take up its alternative offer for housing units under its real estate projects equivalent to Ksh.2.5 billion of invested monies in the two illiquid funds.
The conversion is part of options presented to investors by the company following its inability to honor payments to investors in the funds.
“This demonstrates the advantage of investing in real tangible assets that can be seen and held even in tough times,” noted Cytonn CEO Edwin Dande.
In June last year, Cytonn invoked a force majeure (act of god) clause and a 12 months moratorium on repayments as it cited effects of the COVID-19 pandemic on its operations.
The company has struggled to rekindle the funds to make payments to its high net-worth investors and has attributed the non-payment to a slower than expected recovery in real estate sales.
Subsequently, the company has allowed investors to take up housing units under its various projects including the Alma in Ruaka and Applewood in Karen.
The offer has nevertheless required part of the investors to make cash to-ups to match the value of their investments to housing units taken.
The management of Cytonn could not immediately disclose the number of investors who have taken the alternative homes offer or the number of units taken.
Cytonn has requested for a roll-over of investments by other investors even as it suffers the backlash of non-payment from the funds which total to Ksh.12.5 billion.
In spite of part of the investors mulling a class suit against Cytonn, the company and the investors are presently engaged in arbitration to resolve the standoff which has seen the firm enter a feisty face-off with the Capital Markets Authority (CMA).
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