Kenya played key role in Shelter Afrique turnaround to profitabilityOctober 9, 2019
NAIROBI, Kenya, Oct 9 – Pan African housing development financier, Shelter Afrique has lauded the government of Kenya saying the country played a significant role the Company’s turnaround process.
The Company turned to profitability by June 2019, posting a modest Sh7.8 million (US$ 78, 000) in half-year profits against budgeted loss of Sh72 million (US$ 0.72m) following a successful execution of a turnaround plan.
Speaking in Nairobi, Shelter Afrique Chairman Nghidinua Daniel said the Company owes its speedy recovery to goodwill by member states and more so to Kenya’s support as a host nation.
“Kenya has been supportive in many ways. Whenever we called upon the Kenyan government, we have always received positive support. Additionally, Kenya is one of the countries we’ve financed single largest projects which conform to our affordable housing strategy, and we’ve found ourselves working in tandem in many fronts involving the development of affordable housing,” Nghidinua said.
Some of the projects the Company has launched this year in Kenya include Richland Pointe, Everest Apartments, and Karibu Homes. The Company has also invested in the Kenya Mortgage Refinance Companies (KMRC).
New agreement with lenders
Shelter Afrique Managing Director and Chief Executive Officer Andrew Chimphondah said that in addition to the support by member states, the recovery process had been fast-tracked by the new agreement that the Company entered with its lenders.
“We successfully negotiated and concluded debt restructuring agreement with all our eight lenders and effectively restructured the US110 million debt to be repaid over five years from the existing loan book, with a bullet payment in the fifth year,” Chimpondah.
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 company’s financial performance from loss-making to financial viability by 2020 and overall financial sustainability by 2023. It resumed full operations early 2019.
The Company turned around a Sh500 million (US$ 5.1m) loss recorded in June 2018 into a Sh7.8 million (US$ 78, 000) net profit as on June 2019, against budgeted loss of Sh72 million (US$ 0.72m).