Letlole La Rona Limited (LLR) has agreed to dispose of its 30% equity stake in Orbit Africa Logistics (OAL) for a nominal consideration of $2 (P39), as it moves to exit a long-running underperforming investment.
In a notice to unitholders, LLR said its board had resolved to sell the stake following an extensive review of the investment, citing persistent rent arrears, deteriorating cash flows and a sharp decline in the value of the underlying property.
The buyer is Bora Africa, a subsidiary of Grit Real Estate Income Group, which already controls the remaining 70% of OAL. Exit negotiations between the parties are at an advanced stage.
LLR originally entered the co-investment in July 2022 through a Mauritius-registered special purpose vehicle, acquiring a minority stake in OAL, which owns Stellar Warehousing and Logistics Limited, a Kenyan entity holding an industrial property leased to Orbit Product Africa Limited (OPAL). In addition to the equity investment, LLR advanced a shareholder loan of about $7.2 million at an interest rate of 4%, repayable over five years.
However, the investment soon came under strain as the tenant struggled to meet its rental obligations. LLR said this led to cash-flow challenges at OAL, which in turn resulted in the non-payment of interest on shareholder loans. The situation was compounded by a significant drop in the value of the investment property, which fell from $39.5 million in the 2023 financial year to $26.8 million in 2024 following a renegotiation of the lease.
As part of efforts to stabilise operations, the tenant’s leased space was reduced, and a third-party tenant was brought in at a lower rental rate, further weakening projected returns to shareholders.
LLR said the decision to exit reflects a broader strategy to dispose of non-performing assets and optimise its portfolio. The nominal sale price reflects what the company described as a lack of recoverable value, with financial projections indicating that OAL shareholders would otherwise need to inject substantial additional capital to service debt obligations, including an IFC loan that began amortising in mid-2025.
The company confirmed that the investment and shareholder loan had already been fully impaired in prior financial years, meaning the disposal will not result in any gain or loss in the 2026 financial year. It added that the transaction is not expected to have a material impact on profitability or net asset value going forward.