Casablanca: Morocco’s Addoha Property Group is planning to issue bonds worth 2 billion Moroccan dirhams this week, in a bid to restructure existing debt.
Delivered between July 23–25 the new modernized debt will be secured against a mortgage on a 355-hectare (3.5-million-square-meter) realty owned by the company north of Rabat, making the bonds the first of their kind issued by a Moroccan company.
The new eight-year bonds will be issued in four tranches, two with a 4.76% coupon rate and two set at 5.55%, with one of either pair to be traded over-the-counter and the other at the Casablanca Stock Exchange.
Priority for subscription will be given to investors in the original five-year bonds issued by the company. The prospect will then be opened to new investors to buy any of the new debt when demand from the original investors has been encountered.
Following this development, the Group’s total debt will rise to 8.62 billion dirhams representing 69.4% of its entire capital. The move follows current stagnation in the Moroccan realty market.
The depressed market has led Addoha to concentrate its activity in the Casablanca and Rabat vicinity which are presently having high demand for property.
In 2013, the group adopted a three-year plan restraining its investments to purchases of land in and around Casablanca and Rabat, and began measures to expand outside the Kingdom by acquiring property in West African countries.
In the last few months, the Group commenced seven major projects to construct 13,200 apartments in the Guinea, Ivory Coast, Guinea, Congo and Cameroon. It also signed contracts to construct 30,000 residential apartments in Senegal, Mali, Ghana and Niger.
The Group is also analyzing the possibility of the Arab market particularly in the reasonable priced housing sector and aspires to carry out a quarter of its complete business outside Morocco in upcoming years.