Overview

Altera Holdings structured a USD 30 million blended debt-equity facility for an established industrial park operator based in Nairobi, Kenya. The investment was channelled through an SPV incorporated outside Kenya and was designed to refinance existing senior debt, settle unsecured creditors, and fund further infrastructure investment within the park.

Investment Rationale

The investee operates a significant industrial real estate asset on Nairobi’s Eastern Bypass, with established tenants and income-generating infrastructure. Altera Holdings identified the opportunity to recapitalise the business by refinancing a material bank facility and unsecured liabilities, thereby reducing financing costs and unlocking capacity for the next phase of infrastructure development. The transaction reflected the firm’s thesis on industrial real estate as a high-demand, supply-constrained asset class in East Africa.

Transaction Structure

The facility was structured as a blended debt-equity instrument with the debt-equity split to be confirmed post enterprise valuation.

Debt Component

• Interest rate of 6.5% per annum, compounded annually on a reducing balance
• 8-year tenor with a 2-year moratorium on principal repayment
• 72 equal monthly instalments commencing from month 25
• Disbursed in tranches:
  • USD 15M – bank refinancing
  • USD 5M – unsecured creditor settlement
  • USD 10M – infrastructure investment

Equity Component

• Exit via promoter buyback or replacement investor after year 5
• Buyback option from year 5
• Returns above 18% IRR hurdle split equally through year 7
• Tiered prepayment fee:
  • 1% before end of year 4
  • 0.5% before end of year 6
  • Nil thereafter

Security & Governance

Security comprised a full share pledge, hypothecation of free cash flows, corporate guarantee, and comprehensive risk insurance. A board nominee from Altera Holdings was appointed to provide investment oversight without operational interference. Auditors for internal and statutory audit were appointed jointly by lender and borrower.

Key Highlights

• Industrial Real Estate: Strategic exposure to a high-demand, undersupplied asset class in Nairobi’s logistics corridor.
• Full Recapitalisation: Refinancing of bank debt and unsecured liabilities created a clean capital structure.
• 2-Year Moratorium: Principal repayment aligned with infrastructure development timeline.
• Phased Infrastructure Spend: USD 10M allocated to performance-linked infrastructure expansion.
• Flexible Prepayment: Tiered fee structure balancing investor returns and borrower flexibility.

This case study is for illustrative purposes only. Names and identifying details have been anonymised to preserve confidentiality.