Pan-African housing financier Shelter Afrique has received $28.2 million (Sh2.92 billion) in capital injection from the African Development Bank (AfDB) to shore up its reserves.
The AfDB had last December said it injected $8.2 million (Sh838 million) into Shelter Afrique to strengthen the lender’s balance sheet.
“These new resources show that the African Development Bank is fully committed to the growth and development of Shelter Afrique, which plays a vital and unique role in the development of affordable housing across Africa,” said AfDB’s east Africa regional office director-general Gabriel Negatu in a statement.
Shelter Afrique is banking on shareholders to raise $90 million (Sh9.2 billion) in additional capital to improve its balance sheet.
Lost top credit rating
The lender lost its top credit rating last November in what was attributed to recent concerns over the state of its finances.
At an extraordinary shareholders (EGM) meeting held on January 31, Shelter Afrique, urged its shareholders to inject additional capital or allow it to consider reducing its portfolio in line with the thinning reserves.
On Friday, Shelter Afrique acting managing director Femi Adewole said the funds from AfDB would enable the lender implement its revamped strategic plan.
“We made a very firm commitment to our shareholders and investors to improve our internal processes at the EGM, and they in turn made an equally firm commitment to support us in our mission of delivering affordable housing,” said Mr Adewole.
He added more shareholders including Kenya had promised to inject more capital to enable the lender boost its operations.
“…we have also received letters of intent from some of our major shareholders like Nigeria and Kenya and I believe very soon, you will be hearing of more of these kind of developments,” said Mr Adewole.
Mr Adewole said the housing financier is working to restore investor confidence in its finances and operations.
“We have no doubt that in the short-medium term we would have addressed all the concerns raised and we are confident that the next outlook will be positive,” he said.
Kenya is the largest shareholder of Shelter Afrique among other governments with an 11.16 per cent stake, second to African Development Bank’s (AfDB) majority share of 22.7 per cent.
Shelter Afrique is owned by 44 African countries together with the AfDB and African Reinsurance.
Other large shareholders of Shelter Afrique include Ghana (11.02 per cent), Nigeria (9.62 per cent) and Algeria (7.36 per cent).