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Mortgage financier says police housing project still on

By Otiato Guguyu | Published Wed, February 22nd 2017 at 11:06, Updated February 22nd 2017 at 11:15 GMT +3

Troubled Pan-African mortgage financier Shelter Afrique will still fund a housing project for the National Police Service despite its current financial woes.

The lender is one of four entities bankrolling the construction of 20,000 houses for the disciplined forces at an estimated cost of Sh20 billion.

Other lenders include Housing Finance, Kenya Commercial Bank (KCB) and Africa Development Bank.

Tuesday, Acting Managing Director Femi Adewole said the Pan African lender had enough options to raise money to fulfil its commitments, including the Kenyan project.

He was, however, quick to add that it would go slow on taking up new projects.

“I recently met consultants and paid fees for the 20,000 housing units for the police. We remain open for business and we will fulfil all signed commitments,” he said.

According to an assessment at a meeting held in Nairobi last month, Shelter Afrique would need about $88 million (Sh9 billion) to settle its debt obligations, pay for operations as well as meet commitments for projects that have partially been disbursed and are still ongoing.

The firm would, however, need $127.9 million (Sh13 billion) to meet the commitments and attain a 15 per cent liquidity ratio.

“Quarter one consolidated weekly forecast indicates that Shelter Afrique runs out of liquidity by March 24,” read the assessment in part.

To shore up capital, the real estate financier met with its member countries numbering 44, the AfDB and the Africa Reinsurance Company who have committed to paying up their membership arrears. A call for new capital subscriptions was also adopted unanimously, with member countries committing to transmit their letters of intent to the African Development Bank immediately. Mr Adewole said he had already received written commitments worth $51 million (Sh5.2 billion) from member countries, including Kenya, Uganda, Ghana and Nigeria.

Kenya is the largest country shareholder, with 11.16 per cent stake.

“If we have all the 44 countries committing even $2 million a year, we will have enough to cover our debts, which is not much for many of the treasuries,” said Mr Adewole.

He said the company is raking in interest payments to the tune of $300 million (Sh31 billion) a month, selling assets worth $9 million (Sh931 million), share contributions and an option to borrow.


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