Loss-making Home Afrika sells houses, land to clear Sh79m loan

Home Afrika's Mitini Scapes houses in this picture taken on February 25, 2016.

Photo credit: File | Nation Media Group

Listed loss-making real estate firm Home Afrika is disposing of part of its assets, including houses and land, to repay an outstanding Sh79 million loan by I&M Bank, it said.

Home Afrika said it is looking to sell six housing units off its Mitini Scapes Development along Kiambu Road and Lake View Heights in Kisumu to repay its restructured debt facilities to the bank.

The company said as part of the debt restructuring programme, its directors engaged in negotiations with various lenders including I&M Bank, Cooperative Bank and NCBA Bank to restructure the defaulted facilities.

"During the year ended December 31, 2023, the directors negotiated a final and full settlement with the bank (I&M) of Sh100 million and the group paid Sh22 million during the year, towards settlement of the loan balance," said Home Afrika.

"The outstanding balance of Sh79 million will be repaid in the next financial year from proceeds realised from the sale of six housing units under Mitini Scapes Development Limited and the sale of 5 acres of land under Lake View Heights Limited in Kisumu."

The firm did not disclose how much it had borrowed from I&M Bank and other lenders but in the year ended December, borrowings from I&M Bank amounted to Sh78.9 million from Sh141.3 million in 2022.

The loans were secured by Sh1.3 billion worth of guarantors including a mortgage, debenture and an indemnity corporate guarantee both personal and joint, from the directors.

The developer also has borrowed funds from lenders after failing to raise money privately from a bond issue in 2014.

"The management negotiated for full and final settlement of Sh320 million and Sh460.95 million with Cooperative Bank and NCBA Bank Kenya Plc respectively during the year under review."

The property firm said the negotiations were key in bringing down their finance costs by 37 percent in the year under review while borrowing and private bonds also decreased by 25 percent. The firm is also in battle over an asset with Ecobank after failing to repay a facility.

The bank went to court to liquidate the asset but the high court ordered the pan-African bank to repurchase the property at market value.

The company got funds from financial institutions Ecobank and I&M Bank to fund its Moru Ridge and Mitini projects respectively in 2013.

Ecobank is seizing the Moru Ridge development for failure to pay the loan advance where the project stalled since 2015.

"The bank was unsuccessful in its effort to get a buyer to buy the properties and they did not receive any offers that were close to the cumulative costs [of Sh570 million] so far incurred in putting up the residential blocks," added Home Afrika.

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