Citadel Capital says first-quarter net loss widens

Egypt's private equity heavyweight takes a knock from political turmoil but still finds reasons for optimism

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Egyptian private equity firm Citadel Capital has reported a widened net loss for a first quarter battered by political upheaval, saying its fundraising is likely to be affected for the remainder of 2011.
A statement from the company said Citadel had seen net losses of US$4.5 million (LE26.6 million) on revenues of $2.7m (LE15.9m) in the first quarter of 2011. The firm posted net profits of $0.25m (LE1.5m) for the same period last year.
Egypt's uprising has undermined confidence in the country's economy, slashing inward investment and is making it increasingly difficult so raise funds for new industrial projects.
Citadel said last month it was in buyout talks with more than one potential strategic partner.“The post-Revolutionary period has not been easy,” admitted chairman Ahmed Heikal in the statement.
“Citadel Capital is still in a cash-preservation posture, our previously planned IPOs remain postponed, and we continue to expect lower-than-usual fundraising momentum for the balance of the year.”
But Heikal noted the firm has several reasons for cautious optimism, among them the regulatory approval of Citadel's board for a $175m capital increase and the lifting of a travel ban placed on him in April during a corruption probe. Citadel denies the allegation.
The firm also saw a rise in assets under its management, up 11 per cent year-on-year to $4.1bn, adding $41.6m in the first quarter.
Heikal added that Citadel is committed to all of its investments in the MENA region, underscored by its decision to make $18.4m in new principal investments in 1Q2011.
Shares in Citadel Capital were up 0.75 per cent at LE5.34 in the final minutes of Sunday trade.