Cairo Real Estate Investment and Development Corporation (CIRA) aims to raise around EGP 800 million from the first tranche of the future bond issue worth around EGP 2 billion which will be injected in the company’s projects this year.
CIRA’s chief investment officer, Mohamed Salama, said the issuance will account for around 6% of the company’s total revenue over three tranches. The first tranche this year will be valued at EGP 800 million, the second tranche next year will also be worth EGP 800 million, and the third tranche in 2024 will be valued at EGP 400 million depending business needs.
Salama told Daily News Egypt (DNE) that the proceeds from the deal will be used in the construction works of three universities – namely Assiut University, which is scheduled to open in September 2022; the University of Technology, scheduled to open in September 2023; in addition to the University of Damietta, which is scheduled to open in September 2024 – as well as two to three schools which will open each year.
The financial regulatory authority of the financial group’s securitization company has agreed to issue the first program of multiple issuances of future financial rights securitization bonds worth EGP 2 billion for a period of three years in favor of CIRA as a reference company for the future portfolio of financial rights. The first issue of the program is expected to be for a maximum of EGP 800 million for seven years.
Salama pointed out that the company will inaugurate the first stage of each university and complete the other stages over a period of five years, pointing out that due to high costs, it will slightly increase university tuition fees in the next academic year. .
He also noted that inflationary pressures prompted the company to offer installment programs to fund student tuition and relieve parents, as it had already terminated the contract with ValU to pay tuition, and two other companies are under contract.
Additionally, Salama disclosed that CIRA plans to begin construction work at Future Tech School in August, with the school slated to open in September 2023, and its ownership structure is split between CIRA (65%) and the Sovereign Wealth Fund. Egypt (35%) through a joint investment in the global education investment company that owns the school.
CIRA had previously signed a partnership agreement with the Sovereign Wealth Fund of Egypt to establish two new schools – a branch of Futures Tech and another branch of the Regent British School – in the cosmic village of Sixth of October City at a cost of investment of EGP 350 million.