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Capital Markets

Shelter Afrique to pay Sh11bn loans

Shelter Afrique managing director Andrew Chimpondah
Shelter Afrique managing director Andrew Chimpondah. FILE PHOTO | NMG 

Pan African mortgage lender Shelter Afrique will pay Sh11.4 billion loans over the next five years after it managed to convince its eight lenders to restructure payments.

The company had stated in the annual report that it had reviewed strategy, mobilised capital, changed governance and cut staff costs but were yet to conclude the debt restructure agreements with its eight lenders.

“We successfully negotiated and concluded debt restructuring agreement with all our eight lenders and effectively restructured the $110 million debt to be repaid over five years from the existing loan book, with a bullet payment in the fifth year,” managing director and chief executive officer Andrew Chimphondah said last week.

Shelter Afrique owes African Development Bank, Agence Française de Developpement, Commercial Bank of Africa, European Investment Bank, German KFW, Ghana International Bank, CFA-Banque Ouest Africaine de Developement and Islamic Corporation for Development in unsecured loans.

The effective interest rates were 4.47 per cent for USD-denominated loans, 4.29 per cent for euro denominated, 7.65 per cent for CFA denominated loans and 13.39 per cent for Kenya shillings denominated loans.

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The company has been in negotiations with lenders of the lines of credit for a standstill arrangement, which limits the servicing of principal debt pending debt restructuring.

Last year Shelter Afrique managed to clear the last tranche of the Sh5 billion bond launched in 2013. The bond was fully paid in September 2018.

Shelter Afrique temporarily halted undertaking of new projects in 2016 to pave the way for restructuring of its operations and the development of a new strategic direction, with a primary focus on turning around the its financial performance from loss-making to financial viability by 2020 and overall financial sustainability by 2023. It resumed full operations early 2019.

The company says it has turned around a Sh500 million ($ 5.1m) loss recorded in June 2018 into a Sh7.8 million ($78, 000) net profit as on June 2019, against budgeted loss of Sh72 million ($ 0.72m).

Some of the projects the company has launched this year in Kenya include Richland Pointe, Everest Apartments, and Karibu Homes.

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