Pan-African Housing Financier Shelter Afrique at the 38th Annual General Meeting (AGM) held in Marrakech, Morocco announced that it had reached a new agreement with lenders that the Company was ready to resume new business.
Appraising shareholders at the AGM, Shelter Afrique Managing Director and Chief Executive Officer Andrew Chimphondah said the Company had successfully negotiated and concluded debt restructuring agreement with all the eight lenders, comprising of two commercial banks and six development Finance Institutions- and had effectively restructured the US108 million debt to be repaid over a 5-year period from the existing loan book and not from members’ contributions.
“This has enabled us to regularize the servicing of principal debt obligations with our lenders post the Standstill Agreement period which expired in July 2018. The conclusion of debt restructuring exercise is particularly important in that it now opens an avenue for us to explore new funding options,” Mr. Chimphondah said.
Shelter Afrique temporarily halted undertaking of new projects in 2016 to pave way for the restructuring of the company’s operations and for the development of a new strategic direction.
Mr. Chimphondah said the Company had successfully completed its restructuring program and was in the process of implementing its new 2019-2013 strategic plan which broadly focuses on financial stability, enhanced shareholders value, and organizational sustainability.
He said the primary focus is turning around the company’s financial performance from loss-making to financial viability by 2020 and overall financial sustainability by 2023.
“A prerequisite in achieving this is the resumption of new business in 2019 and the expected support from shareholders with regards to capital subscription calls of 2013 and 2017,” he said.
Mr. Chimphondah said Shareholders has also given the Company a nod to raise new capital through equity and debt options to fund its operations in the next five years of its strategic plan, through direct funding (line of credit), co-financing and bridge finance for working capital lines.
“We have been given green light by shareholders and we’ll soon kick-off roadshows to that effect. Already, we have started off a process of identifying active member countries for local currency bonds starting 2021. We are also working on restoring equivalence of Moddy’s Ba1 credit rating, after which we’ll consider tapping into Eurobond market for modest ticket issues of up to US$300 million on committed project lines,” Mr. Chimphondah explained.
Shareholders also voted unanimously to re-elect Mr. Daniel Nghidinua as the Chairman of Board of Director for the next two years.
Mr. Nghidinua first took over the Chairmanship of the 11th Shelter Afrique Board in March 2017, at a time when the company was undertaking a major overhaul of its business and its structure. He has overseen the positioning of the Company as an investment-grade organization and a capital drive and opening of membership to new Class C shareholders.
Accepting his re-election, Mr. Nghidinua said: “I’m overwhelmed by the confidence shareholders have in me and the entire Board and our promise to them is to continue steering the company in the recovery path to create shareholder value as it meets its mandate of financing affordable housing in member countries.”