Our Profile
Our Solutions
Asset Managers
Real Estate
Capital Partners
Markets We Serve
Blogs
Videos
{{ text }}
Frequently Asked Questions (FAQs)
There was no insurance cover against loss in CHYS/CPN investments
All investors on record in both CHYS/CPN, both local and diaspora clients, are included in the ongoing debt resolution.
Senior Lenders such as Banks and funds with registered charge documents are secured creditors who rank higher than unsecured creditors including the CHYS/CPN investors, therefore at the point of debt settlement, senior and secured lenders are paid first. It does not matter at what time they invested into the projects at the point of cashflow settlement.
There is a telegram group to which one is added. See herein the link to support the debt settlement proposal through restructuring.
The assets and liabilities of the CHYS/COPN funds are to being handled by the Official Receiver as the liquidator over the funds.
Yes. This was shared on 31st August 2021.
Yes, the appeal window is still open however, clients need to make a quick decision whether they are supporting restructuring or liquidation, as there is an imminent risk of asset disposal to pay off senior lenders first and leaving CHYS/CPN creditors unable to realize best value on quick asset disposals.
No. The appeal will be purely based on merit and the arguments placed before the judge. However, having more clients supporting the debt settlement proposal as opposed to the liquidation process will strengthen the appeal case.
Yes. Filing the proof of debt was only a formality. That does not prevent one from supporting restructuring to realize best value for investors funds.
Edwin Dande is not and cannot be part owner of a Law Firm as he is not admitted as an Advocate of the High Court. His dealings in Mali are limited to consultations on business due to his extensive experience in the Cytonn business that has litigations. Furthermore, in the case of the Appeal, Cytonn’s interests and those of the creditors and/or real estate unit holders are aligned.
Only investors in Real Estate, who are seeking to enjoin on appeals pay the appeal fees of Kshs. 30,000. A deposit of Kshs. 10,000 is paid on initial instruction, the balance is paid as follows; Kshs.10,000 is to be paid at hearing stage; and Kshs. 10,000 to be paid on judgment.
Just like any other court matter, Mali Advocates will represent the real estate holders and CHYS/CPN investors to the best of their ability in accordance with the duty owed to every client by their Advocates. However, the final decision rests with the Court. The fees are not refundable, however the appeal is a consideration each investor needs to undertake if they deem that in their best interest to pursue the restructuring, in the benefit of getting best value for their investments.
Yes. CHYS/CPN do not pay any appeal legal fees, the legal fees are currently being borne by Cytonn.
You can do this by signing the restructuring support letter. Kindly follow this link to download a copy, fill in the details and share back to clientservices@cytonn.com
This information can only be acquired from the office of the Official Receiver. However Cytonn shared with OR information for all investors balances as per their request for information.
We are not in a position to speak on behalf of the OR, he has however organized one official meeting; and subsequently sent letters to investor; using the official domain brs.go.ke. However, we know he has been engaging the clients and any progress from their side has been updated to the clients who have attended the meetings organized by their offices.
Do get intouch with the office of the Official Receiver whose offices are located on 17th Floor, 316 Upperhill Chambers, 2nd Ngong Avenue, Upperhill, Nairobi, Kenya
In accordance with Insolvency Laws, the Official Receiver as Liquidator is entitled to receive compensation for costs incurred in the Liquidation process.
We are obliged by law to cooperate with the OR, which we have continued to do, including supplying information related to the two funds, until such a time when liquidation will be stopped by the court through the ongoing appeals.
The Liquidation process provides for the winding up of the CHYS/CPN investment vehicles. The Official Receiver takes over the funds, gathers all the assets and pays all liabilities, in order of senior and secured creditors, followed by unsecured creditors. The CHYS/CPN Creditors will be paid out as part of the unsecured creditors/liabilities.
From Cytonn’s analysis, Liquidation will result in creditors recovering only 14% of their total investments. This figure was achieved by the disposal of the assets at forced sale values in the market; and offsetting the liabilities owed to the senior and secured lenders first; then CHYS/CPN and other creditors such as vendors who are owed who are unsecured.
The liquidation values for example will consider incomplete projects disposal values, based on market update. The values will also consider what is due to secured lenders first, and finally trickling down to unsecured creditors.
From our analysis, a liquidation will result in the creditors recovering only 14% of their total investment while they will recover their full Principal via the DSP.
Restructuring and liquidation cannot work together since they stand for different ideologies. The meeting is meant to convince the investors to support restructuring since it stands for more value for the investors.
Yes, the liquidation process is already underway. However our legal team had already filed a notice of appeal in the appellate court and obtained the certificate of delay.In light of this the liquidation process can still be stopped.
By signing the Restructuring Support Letter/Form as provided by the Principal Partner and can be accessed under this link.
This decision was arrived at after receiving feedback from CHYS/CPN Clients that an independent entity should implement the Restructuring.
The investors will be part of the Board spearheading the restructuring and thus can easily keep track of the process.
The investors will be part of the Board spearheading the restructuring and thus can easily keep track of the process and ensure the CHYS/CPN investors’ interest is covered. Furthermore, the restructuring is to be approved by the court, it will be binding and the fund manager will be held accountable in case it is not fruitful.
Our evaluation of the complete projects easily shows that we can refund 100% of the money paid in the said period.Given that the restructuring proposal has to be approved by the court, it will be binding and the fund manager will be held accountable in case it is not fruitful.
During that period we will be working to complete the project and recover the principal in full first. Any monies raised above that will be distributed to the clients in an equitable manner
Unfortunately from our analysis, despite Cytonn’s best efforts, we will only be able to give back Principal invested.
As we have shared, the funds are currently illiquid and there are insufficient funds to pay out 20%. As indicated in the DSP that we have shared with the creditors and the Official Receiver, the repayment plan will be 20% in 2025, 20% in 2026, 20% in 2027 and 40% in 2028.
In 2021/2022 we were in discussions with the Administrator on the restructuring plan. However, discussions with the Administrator were unfruitful as the funds were put into liquidation before any meaningful progress could be made.
All clients must be treated equally and fairly. Furthermore, it is not easy to specify what small amounts really mean. Once the DSP is approved, the Board which includes the creditors’ representative may vote to allow extreme cases to be paid out first.
As of 30th June 2023, the number of CHYS/CPN Creditors who have signed the restructuring agreement are 60. The list has been growing since then.
The DSP proposes that CIM will float its shares on a Unlisted Security Platform (USP). We expect this move to open doors for investors to buy back shares at KShs 1.5 bn per year from equity holders who seek to exit early.
This is welcome, if you have a buyer we will assist in completing the buyout process, if not we will notify you when we have a buyer ready.
Conversion and assignment of CHYS/CPN investments was an option offered to all investors and those willing already took up real estate units to dispose at credible rates at their own time.
Principal, regardless of period of investment, is simply the amount that the investor sent into the funds. This means we shall exclude any interest accrued whether paid or not yet paid. This was confirmed at a meeting with the Official Receiver on 7th March 2023.
The projects are currently on hold due to illiquidity of funds and the preservation orders issued by the High Court in E063 of 2021 and E064 of 2021
The period after the Covid-19 pandemic has not seen much activity in real estate and that is why the investment manager is proposing a waiver of that interest. However, we expect the share component of the restructuring offer to make up for the lost interest when the shares gain in value.
We have negotiated with all stakeholders including the banks for the best possible outcome for everyone involved.
The Current debt settlement plan (DSP) was arrived at after expert analysis of the current illiquidity of the CHYS/CPN funds and realistic projections of what is indeed possible while considering what is in the best interest of the CHYS/CPN Clients. We have, however, always been open to suggestions and have incorporated recommendations by the CHYS/CPN Creditors which we have received in all CHYS/CPN Restructuring Meetings.
Failure to take a stand means a Creditor has no say in what happens with his/her investments which we deem a risky approach.
The collections during post covid were not significant enough to advance the projects. Not much has happened to the projects and consequently we need to restructure so as to advance the projects.
This will be achieved through asset sales e.g Kilimani Land. We foresee reduced litigation following the consensus arrived at between Cytonn and the CHYS/CPN creditors
Prior to the preservation orders issued on 6th January 2023, we had received bids from several interested buyers and our lawyers had already shared the sale Agreement with the most eligible buyer to begin the sale process. There are many potential buyers who have only been deterred by the court ruling.
Our aggressive real estate strategy was upended by the onset of Covid 19, which upset the liquidity of real estate funds globally. Further, the effects of the incessant negative publicity driven by CMA’s management and several others also led to put a strain on our two main real estate funds during an already difficult period. This led us to only do one project at a time starting with ‘The Alma’.
They are welcome to join the appeal of lifting preservation orders. This is done by signing the Real Estate Appeal Letter (REAL) available on this link and paying kshs.30,000 legal fees.A deposit of Kshs. 10,000 is paid on initial instruction, the balance is paid as follows; Kshs.10,000 is to be paid at hearing stage; and Kshs. 10,000 to be paid on judgment
The preservation orders issued by the High Court on 6th January 2023 in Insolvency Petition E063 of 2021 and E064 of 2021 prevent transfer of Title to yourself. We advise you to join the appeal by real estate unit holders like yourself who have been prevented from concluding the transfer process by the said orders. For further assistance on all other matters including possession please contact rei@cytonn.com
Alma had been selling well prior to the preservation orders issued by the High Court in Insolvency Petition E063 of 2021 and Insolvency Petition E064 of 2021.
The preservation orders issued by the High Court on 6th January 2023 in Insolvency Petition E063 of 2021 and E064 of 2021 prevent transfer of Title to yourself. We advise you to join the appeal by real estate unit holders like yourself who have been prevented from concluding the transfer process by the said orders. For further assistance on all other matters including possession please contact rei@cytonn.com
Cysuites clients form part of the creditors who have a claim on the Property.
Construction of the Ridge is expected to commence once the Alma is completed i.e. approximately two quarters after the DSP is approved.
A positive ruling on the stay application and/or Appeal by the High Court and Court of Appeal respectively.
Due to the ruling delivered by the High Court in Insolvency Cause E063 of 2021 and Insolvency Cause E064 of 2021, Riverrun is under preservation and thus no transfer can be done.
We have engaged all our SEIP clients and we have a repayment plan which both parties agreed and we have already started funds disbursement.
All Court processes lodged by Cytonn were done in a bid to protect the brand’s brand and reputation.
Subscribe to our Weekly Updates
Get reports and updates from Cytonn Investments about trends in the market and industries. Visit Cytonn Report