Citadel Capital Reports Second Quarter 2010 Results, Delivery of Four Greenfields

Leading private equity firm reports the start of operations at four greenfields, 5.3% growth in TNAV since FY09 and rising invested assets under management quarter-on-quarter

(Cairo, Egypt) — Citadel Capital (CCAP.CA on the Egyptian Stock Exchange), the leading private equity firm in the Middle East and Africa, announced today its standalone financial results for the second quarter of 2010. The firm reported the start of operations at four greenfield projects as well as a 1.7% rise in portfolio net asset value (PNAV) and a 12.5% rise in asset management value (AMV), the combined effect of which was a 5.3% rise in total net asset value per share (TNAVPS) of Citadel Capital as at 30 June 2010.

“The second quarter of 2010 was about delivering on our promises to investors,” said Chairman and Founder Ahmed Heikal. “In our last Business Review, we pledged to fine-tune our balance sheet by recovering loans that we had extended to Platform Companies to bridge LP delays in answering capital calls. We also set targets to close the debt package for the Egyptian Refining Company, to deliver four more greenfield projects and to achieve first close on the MENA and Africa Joint Investment Funds. We have delivered on all fronts.”

With no exits in the second quarter, the firm reported net income of US$ 0.05 million (EGP 0.3 million) on revenues of US$ 6.8 million (EGP 38.5 million) on a standalone basis.

In the second quarter of 2010 Citadel Capital delivered four greenfield projects, in addition to the first-quarter completion of two others. Projects included the soft-launch of Designopolis (the Middle East and Africa’s first home furnishings destination under Platform Company Bonyan), ASEC Ready Mix (a concrete production and distribution plant in Upper Egypt under Platform Company ASEC Holding), Al-Takamol Cement (Sudan’s most technologically advanced cement plant, also under ASEC Holding) and Berber for Electrical Power (a power-generation plant in Sudan under Platform Company TAQA Arabia that will provide Al-Takamol with all of its electricity needs).

As part of the ongoing fine-tuning of its balance sheet, Citadel Capital recovered significant bridge financing extended to platform investments. Loans to Platform Companies thus declined 48.8% to EGP 221.7 million.

“We will continue to adjust the distribution of our investments in 2H10 as final close is reached on the MENA and Africa Joint Investment Funds, which will then invest in certain warehoused investments,” said Heikal. “This will allow Citadel Capital as a principal investor to redirect some currently invested funds to other Platform Companies and / or to new investments.”

The firm made new equity investments in platforms including Wafra (Sudanese agriculture), Nile Logistics (river transport and port management), East Africa Railways and the Egyptian Refining Company, among others.

Total assets under management (committed equity) at the end of 2Q10 were stable quarter-on-quarter in dollar terms at US$ 3.7 billion (EGP 20.9 billion), as the first close of the MENA and Africa Joint Investment Funds was a material event taking place after the end of the reporting period. The firm had total investments under control of US$ 8.3 billion (EGP 45.5 billion) as at 30 June 2010.

Total invested AUM as at 30 June 2010 rose a net 2.3% (or EGP 366.7 million) to US$ 2.9 billion (EGP 16.6 billion). Total third-party AUM rose US$ 58.3 million (EGP 328.8 million) to US$ 2.1 billion (EGP 12.1 billion), an increase of 2.8%. Total invested AUM included US$ 1.9 billion (EGP 10.7 billion) of third-party fee-earning assets under management, a rise of 1.3% from the end of 1Q10.

“We are also very pleased to note that after the end of the quarter we were able to finalize a US$ 2.6 billion debt package for the Egyptian Refining Company (ERC), one of the largest private sector industrial development projects in Africa,” said Heikal.

The signing of the debt package came just weeks after the International Finance Corporation (IFC) announced that it would make a US$ 100 million equity investment in the project. The signing of the debt package paves the way for the finalization of the equity component of the investment, which will add US$ 1 billion in fee-earning AUM to Citadel Capital’s total assets under management when it closes in the fourth quarter of 2010.

The firm’s base of third-party fee-earning AUM is also expected to rise with the combined US$ 500 million final close of the MENA and Africa Joint Investment Funds targeted for early 2011. The sister funds achieved a US$ 140 million first close in July 2010 with committed and circled funds from leading global institutional investors.

The United States Overseas Private Investment Corporation (OPIC) has extended a US$ 100 million financing facility, which will be invested alongside select investments of Citadel Capital and of the firm’s MENA and Africa Joint Investment Funds.

Management’s discussion of operational performance as well as details of Citadel Capital’s 2Q10 standalone financials are available for download at

Note to Editors: Please click here to download the full 2Q10 Business Review, which includes summary financials as well as text and graphics explaining the total asset valuation methodology and a detailed analysis of performance in the quarter.

Second Quarter 2010 in Brief

I. Citadel Capital as a Principal Investor (Own Balance Sheet)

  • Total principal investments (including convertibles and interest-bearing loans to Platform Companies) stood at US$ 788.9 million (EGP 4.5 billion) at the end of 2Q10, a 0.9% rise over the previous quarter as the firm targeted a declining balance of loans while increasing its equity investments.
  • Equity investments by Citadel Capital as a principal investor in 2Q10 rose 8.9% to US$ 679.3 million (EGP 3.8 billion), all in existing Platform Companies.
  • Interest bearing loans to platform and portfolio companies declined 48.8% to EGP 221.7 million.
  • Convertibles in platform and portfolio companies declined 13.6% to EGP 400.2 million.
  • The portfolio net asset value (PNAV) of Citadel Capital’s principal investments in the 19 Opportunity-Specific Funds (OSFs) it controls rose 1.7% from year-end 2009 to US$ 1.2 billion (EGP 7.0 billion).
  • PNAV per share (PNAVPS) stood at US$ 1.86 (EGP 10.51) at the half-year mark.
  • Gains from the sale of principal investments were nil 2Q10, as the firm did not execute exits in the quarter, compared with EGP 9.58 million in 1Q10.

II. Asset Management Business

  • Total assets under management (committed) in Citadel Capital’s 19 Opportunity-Specific Funds (OSFs) were unchanged in 2Q10 from US$ 3.7 billion (EGP 20.9 billion) at the end of the first quarter of 2010. First close of the MENA and Africa Joint Investment Funds and the OPIC financing were material events after the quarter.
  • Total invested AUM rose 2.3% quarter-on-quarter to US$ 2.9 billion (EGP 16.6 billion).
  • Total invested third-party AUM rose 2.8% in 2Q10 to US$ 2.1 billion (EGP 12.1 billion). New LP investments in the period were weighted toward agriculture and consumer foods, oil and gas and convertibles.
  • Total third-party fee-earning AUM stood at US$ 1.9 billion (EGP 10.7 billion) at the end of 2Q10, a rise of 1.3% quarter-on-quarter.
  • Revenue from advisory fees stood at US$ 4.51 million (EGP 25.4 million), up 2.7% on the previous quarter.
  • Revenue from Citadel Capital’s carried interest in its limited partners’ proceeds from exited or partially-exited investments was nil, as it was in 1Q10.
  • Asset management value (AMV), which captures the present-day value of Citadel Capital’s asset management business, stood at US$ 681.4 million (EGP 3.8 billion) at 1H10, a rise of 12.5% from US$ 606.0 million (EGP 3.4 billion) at year-end 2009. The increase reflects significant progress on the fundraising front in the first half of 2010.
  • Asset management value per share (AMVPS) stood at US$ 1.03 (EGP 5.81) at the half-year point.

III. Total Net Asset Value

  • Total net asset value (TNAV) of Citadel Capital, which captures both the value of the firm’s principal investments (PNAV) and of the asset management business (AMV), was US$ 1.9 billion (EGP 10.8 billion) for the period ending 30 June 2010, a rise of 5.3% from 31 December 2009, when the TNAV was last published.
  • Total NAV Per Share (TNAVPS) was US$ 2.89 (EGP 16.32) at the end of 1H10.

IV. Financial Highlights

  • Citadel Capital revenue in 2Q10 reached US$ 6.8 million (EGP 38.5 million), an 8.8% dip from US$ 7.5 million (EGP 42.3 million) the previous quarter. The firm sold no investments and recorded a 2.7% rise in income from advisory fees.
  • EBITDA for the three months ending 30 June 2010 stood at negative US$ 0.7 million (EGP 3.8 million) compared with a negative US$ 1.9 million (EGP 10.8 million) the previous quarter, an improvement (despite the lack of revenue from sale of investments) that reflects declining OPEX.
  • Net income after taxes in 2Q10 was US$ 0.05 million (EGP 0.3 million).
  • Debt-to-equity ratio stood at 22% as at 30 June 2010, unchanged from 31 March 2010. Across the firm’s platform investments, the average debt-to-equity ratio at the end of the first half of 2010 stood at 65% (excluding both Citadel Capital and the Egyptian Refining Company).


Citadel Capital (CCAP.CA on the Egyptian Stock Exchange) is the leading private equity firm in the Middle East and Africa. Citadel Capital focuses on building regional platforms in select industries through acquisitions, turnarounds, and greenfields executed via Opportunity-Specific Funds. The firm’s 19 OSFs now control Platform Companies with investments worth more than US$ 8.3 billion in 14 countries spanning 15 industries, including mining, cement, transportation, food and energy. Since 2004, Citadel Capital has generated more than US$ 2.5 billion in cash returns to its co-investors and shareholders (on investments of US$ 650 million), more than any other private equity firm in the region. Citadel Capital is the largest private equity firm in Africa by PE assets under management (2005-2010, as ranked by Private Equity International). For more information, please visit

For more information, please contact:

Ms. Ghada Hammouda
Head of Corporate Communications
Citadel Capital (S.A.E.) (click to reveal this email)

Tel: +20 2 2791-4440 • Fax: +20 22 791-4448
Mobile: +20 16 662-0002