Pan-African housing development financier Shelter Afrique has repaid Ksh.20.52 billion commercial debt owed to eight lenders, giving the company the leverage to underwrite new debt worth Ksh.51,31 billion.
The lenders include the African Development Bank, Agence Française de Developpement, Commercial Bank of Africa, European Investment Bank, German KFW, Ghana International Bank, CFA-Banque Ouest Africaine de Development, and Islamic Corporation for Development.
“Despite Debt Restructuring Agreement giving us a window to make full loan repayment by June 2024, we successfully repaid all the loans by June 2021. This was possible due to the new structures we put in place to deal with bad debts and loan recoveries as part of our turnaround plan. This now affords us the ability to underwrite new business and debt without constraints and legacy matters. For instance, based on our current Equity Capital base of USD 155M and a debt-equity ratio of 0%, we can instantly raise new debt of up to USD 465 million,” said Shelter Afrique Group Managing Director and CEO Andrew Chimphondah.
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The company has also repaid a bond floated on the Nairobi Stock Exchange (NSE) between 2013 and 2018.
This enables it to return to the capital market to raise Ksh125 billion in local currency bonds by the end of the year.
“With the debts fully retired, we now intend to mobilise a local-currency equivalent of $500 million each from Nigeria and East Africa, as well as $250 million from French-speaking African nations. These will be crucial in funding our demand-side pipeline of as much as $1 billion which we are currently developing,” said Shelter Afrique Group Managing Director and CEO Andrew Chimphondah.
Besides the bonds, Shelter Afrique was exploring further shareholder financing. \
“In the past few months, we have raised a significant amount from our current shareholders, admitted a new shareholder (Fonds de Solidarité Africain -FSA), and resolved to open a new class C group of shareholding for non-African entities to widen our shareholding and capital resource bases,” Mr Chimphondah said.
The Company was already in talks with some keen organisations and countries who share a similar commitment to affordable housing in Africa.
