Mortgage: Shelter Afrique seeks fresh cash injection as debt looms

Deputy Executive Director -UNHabitat- Dr. Aisa Kyawira (L) and Acting Managing Director- Shelter Afrique. Mr. Femi Adewole (PHOTO: James Wanzala,Standard)

NAIROBI, KENYA: Mortgage lender Shelter Afrique is shopping around for new shareholders to help it meet its debt obligation as countries drag their feet to fund it.

The firm, which is co-owned by 44 African nations, the AfDB and the Africa Reinsurance Company, has been calling for a bailout to meet liquidity ratios, pay its debt and finance its strategic goals.

Kenya is the largest shareholder with an 11.16 per cent stake.

“Currently, we are exploring shareholder financing. We have raised a significant amount from our current shareholders and we have also resolved to open a new class C group of shareholding for African and Non-African entities alike. We have begun talks with some keen organisations and countries who share our commitment to affordable housing in Africa,” said the Pan African real estate financer in an emailed statement.

The lender told Financial Standard that nine countries and two institutional shareholders (AfDB and Africa Re) had already remitted their annual subscription totalling $45.6 million (Sh4.7 billion).

Cooking books

“We anticipate that the number to be over $50 million (Sh5.1 billion) by the end of January,” said the firm.

Shelter Afrique last year saw its former boss James Mugerwa (pictured) forced out over allegations of cooking books and staff harassment.

The malpractices saw the mortgage financier plunge into a funding gap to operate at a 25 per cent capital adequacy ratio, which is below the operational limit of 30 per cent.

The lender now faces maturing debt in March next year, stepping up the pressure to get additional funds.

“The September bond was settled (an estimated Sh1 billion principal plus interest). Next payment is March 2018, which will be settled when it falls due. We are committed to our bondholders,” said the firm.