Shelter Afrique fully repays commercial debts, eyes regional bonds

Shelter Afrique Group Managing Director and CEO Andrew Chimphondah [Charles Olero|Zonk News-FILE]
NAIROBI, Kenya— Pan-African housing development financier Shelter Afrique has fully paid off USD186 million commercial debts owed to eight lenders, three years ahead of schedule, giving the company the leverage to underwrite new debt.

The USD186 million includes interests owed to 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.

In 2018, Shelter Afrique signed a Debt Restructuring Agreement with the eight lenders – six DFIs and two commercial banks – to restructure its debt with a new 5 – Year tenor to run from June 2019 to June 2024.

Speaking during the announcement on Tuesday, the firm’s Managing Director and CEO Andrew Chimphondah said, “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.”

He attributed the success to “the new structures put in place to deal with bad debts and loan recoveries” as part of the group’s 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,” Chimphondah said.

The company has also repaid a bond floated on the Nairobi Stock Exchange between 2013 and 2018.

Shelter Afrique now plans to return to the capital market to raise USD1.25 billion in local currency bonds by the end of the year.

Mr. Chimphondah remarked that “They intend to mobilise a local-currency equivalent of USD500 million each from Nigeria and East Africa, as well as USD250 million from French-speaking African nations.” These will be crucial in funding the demand-side pipeline of as much as USD1 billion, which the group is currently developing.

He commented that In the past few months, the firm has 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 shareholding and capital resource bases.