Firmcare Construction to raise money for distressed properties

Firmcare Construction, a local investment company, is seeking to raise US$2,5 million for re-development of distressed properties, according to a note to investors seen by this publication.

Known as the Product Distressed Investment Strategies Fund, the instrument offers zero-coupon, two-year bond with a target yield to maturity of 9,5 percent.

The instrument is an asset-backed corporate bond with a face value of US$1 000 per bond.

Minimum Investment is US$1 000, while bond price is US$833.33

“Firmcare must estimate the fair value of the properties and upside potential post restructuring and development.

“This investment strategy is also attractive to pension funds that are in distress as they can invest in cash or in specie for a 12- 24-month horizon in which they can unlock liquidity and interest income from the bond,” said Firmcare.

The funds raised will capacitate development of real estates projects.

“The fund seeks to provide an absolute return and liquidity to investors by investing in real estate development.

“Firmcare Construction will achieve its returns by picking real estate assets showing early signs of distress

(diminishing capacity to provide liquidity to owners), re-design the asset and develop residential or commercial property in demand.

“Firmcare can buy these real estate properties at a discount to their eventual value because the owners may not have the expertise and patience to go through a lengthy development or restructuring process.”

Some people use their investment in property as a store of value.-ebusinessweekly