Orbit Products Africa Limited (Opal), which is the contract manufacturer in Kenya for Reckitt, Colgate-Palmolive and Unilever owned by brothers Sachen and Dirchen Chandaria, has raised more than Sh5bn by selling its own manufacturing plant and warehousing in Mlolongo, as buildings, to Mauritius-based Grit Real Estate Income Group (Grit).
The IFC, arm of the World Bank, has provided half of the finance for the developer to purchase the Opal facility, at $28.6mn, while Grit has raised another $25mn through a corporate bond issue. Once the redevelopment is complete, the buildings will be leased back to Opal to continue its manufacturing.
“At a time when finance is a strained issue everywhere in the world after the unprecedented economic shock delivered by the Covid-19 pandemic, and with our own East African banking system working hard to contain its risk through restructuring existing lending, ‘sale and lease back’ opens a new path to cash injections and finance for manufacturing expansion,” said Sachen Chandaria, CEO of Orbit.
