Shelter Afrique to return to bond market as loss shrinks to Ksh.63 million

Pan-African affordable housing firm Shelter Afrique has set its sights at a return to the corporate debt market after cutting its full year loss by 94 percent to Ksh.63 million.

The significant trim to loss making follows significant cost reductions that saw the company reduce its outstanding debt by 39 percent to Ksh.7.7 billion.

Shelter Afrique further trimmed its exposure to defaults as the stock of its bad loans shrunk by Ksh.1.7 billion in the year ending March 31.

The lower costs accompanying the trim in loss making lifted the firm’s liquidity ratio to 29 percent as cash at hand hit Ksh.6.2 billion in the period.

The company further added Ksh.1 billion as fresh capital receipts from its shareholders to lift equity funding by eight percent to Ksh.12.3 billion.

The management of Shelter Afrique expects the improved balance sheet position to boost its return to the corporate bond debt market as the company seeks to prop up project financing.

“These gives confidence to investors as we seek to raise new funds. Our goal remains to achieve financial stability, reduce loss making and raise capital to become relevant again,” noted Shelter Afrique Managing Director Andrew Chimphondah.

“We will require at least two years of profitability. We can hopefully get there this year or the next one,” added Shelter Afrique Chief Finance Officer Kingsley Muwowo.

The firms outlook is however expected to be shaken up by volatilities arising from the Covid-19 pandemic which have already constrained activity including project-site visitations.

“This are not ordinary times. We are living in uncertainties and this is the only certainty we know. Covid-19 is exerting a very heavy toll,” said Shelter Afrique newly installed Chairman Dr. Steve Mainda.

Further to the planned corporate bond, Shelter Afrique is seeking to raise its paid up shareholder capital from to match the issued Ksh.39.6 billion.

The company is set to shortly unveil ‘class C shareholders’ which include institutions drawn from outside the continent including sovereign countries and multilateral lenders such as the French Development Agency (AFD).

Shelter Afrique is majority owned by 44 African countries including Kenya, Rwanda, Morocco, Uganda and Mali.

The company first ventured into the corporate bond market in 2013 having raised Ksh.2.5 billion.