CHYS-CPN Updates

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Updates

Cytonn offers over 12 different portfolios across our various products in real estate, regulated products, and private products. Due to the negative effects of the 2020 COVID-19 pandemic and the incessant negative publicity following Cytonn, two products being Cytonn High Yield Solutions (CHYS) and Cytonn Real Estate Project Notes (CPN) became illiquid.

The board of investors of CHYS and CPN, which is made up of investors themselves, resolved to close out the funds pursuant to the investment authority per the Partnership Agreement so that the focus was now on how to monetize the assets to return value to investors – No new investments, rollovers, or interest accrual from 31st August, 2021.

The Board also made an application for the two funds to proceed to administration which occurred from 6th October 2021. Following the slow progress of the Administration process, the Principal Partner (CIM) came up with a proposal to restructure investment funds into zero coupon bonds and equity in CIM Plc.

While administration and discussions on the proposal by CIM was ongoing, an application was made by a few creditors requesting the Administration to be lifted.On 6th January 2023, the High Court issued a ruling lifting the Administration and putting the two investment vehicles - CHYS and CPN under liquidation. The said ruling also preserved several real estate properties.

Following the ruling, several actions have been taken;

We met the Official Receiver on 15th March 2023 and presented our Debt Settlement Plan, we await response.
We had several clients, totaling about Kes. 366 million seeking to attach assets for themselves so we had to get a Stay application against these efforts – orders gotten on 23rd April 2023.
We still believe that a Debt Settlement Plan, which returns 100% of Principal compared to Liquidation, which returns 14% of Principal is the best way to go.
Given no response on the DSP from the Official Receiver and given the Liquidation Orders were obtained by only 4 creditors, we are proceeding with an appeal at the Court of Appeal

Request for Nomination of Candidates to Regional Restructuring Committees

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