Nigeria's US Dollar liquidity shortage is slowing down the Sale of Ikeja City Mall

This morning, AttAcq Limited and Hyprop Investments, the owners of Ikeja City Mall advised their shareholders that the US Dollar liquidity shortage in Nigeria is having an impact on their ability to effectively dispose of the asset. Last year, the selling parties entered into an agreement for the mall to be purchased by Actis, via their new funds called the Actis Africa Sustainable Real Estate Income Fund and Actis West Africa REIF LP. In Hyprop’s financial statement for the period ended June 2020, they explained that the purchasers had concluded their due diligence, however, the sale remained subject to regulatory approvals and their ability to raise the necessary finance to settle 70% of the purchase price. The liquidity shortage, driven by an excess demand for FX in lieu of the Naira, among other things, has made this process difficult.

The immediate implications of this are that:

• The long stop date for the transaction has been extended to 31 July 2021, and maybe extended further if the US dollar liquidity shortage has not markedly improved by such date.
• The second is that the parties have agreed that the Sellers may engage other potential buyers for the property, and should the Sellers wish to enter into an agreement with other buyers, they are required to terminate the existing agreement prior to the long stop date.
• Despite their dedication to exit their sub-Saharan Africa (excluding South Africa) investments as seen through the disposal of Manda Hill and Achimota Malls, AttAcq Limited and Hyprop Investments have resolved not to incur any further transaction costs (including legal fees on the transaction documents and merger approval process) until there is an improvement in the US dollar liquidity in Nigeria.

You can download the announcement on Estate Intel.