Mortgage lender gets nod to restructure loans

Bond holders have given Shelter Afrique a go ahead to renegotiate it’s short term loans over the next three months.

The mortgage lender can now breathe easy and bring the seven banks to the table to iron out friendlier terms for the loans.

Shelter Afrique boss Femi Adewole said yesterday that the lender will now focus on rebuilding confidence in the instituon.

“We can now go ahead with signing the Standstill agreement which will close at June. Am happy that we can now move ahead and am confident  since slot of work has already been done over the last 15 months, ” Mr Adewole said.

Shelter Afrique which had an Sh5 billion bond had paid off most of the corporate loan remaining with a balance of Sh825 million.

The lender has maintained that it is able to settle the bond when it comes due in September but needed to negotiate other short-term loans to manage its balance sheet.

However, Capital Market regulations required the bondholder’s approval to structure the short-term loans.

Me Aureole said they were in talks with the seven banks including Africa Development Bank, German development lender KFW,  European Investment Bank and French development lender AFD to negotiate newly favorable arrangements.

During the last quarter of 2016, negative information on Shelter Afrique surrounding the credibility of its financial statements and provisioning policies came out into the public domain.

Due to this negative publicity, Shelter Afrique was unable to access adequate funding from its lending partners.

As a result, Shelter Afrique experienced liquidity constraints making it difficult for the company to underwrite new business and meet some of its short-term obligations.

Me Adewole now says the mortgage lender is well capitalized and is &opping to pick up new investments including buying a stake in the Kenya Mortgage Refinance Company.

Shelter Afrique already has stakes in mortgage refinance companies in Togo, Nigeria, and Tanzania.

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