Shelter Afrique acting Managing Director Femi Adewole
Cash-strapped Pan-African housing financier Shelter Afrique has received a $5.8 million cash injection from some of its shareholders.
This follows a capital call on arrears made at the Extraordinary General Meeting in Nairobi in January. Acting Managing Director, Femi Adewole said the cash came from Cameroon and African Reinsurance, an institutional shareholder Of the total sum of Sh580 million, he said, Cameroon contributed $2.3 million while Africa Re contributed the balance of $3.5million.
He said: “Our shareholders continue to show that Shelter Afrique is viable and indeed valuable. These capital subscriptions show that our member countries and shareholders understand how critical affordable housing is to the growth of the continent, and how Shelter Afrique can be instrumental to achieving that and the objectives of the new urban agenda that was passed in Quito last year.”
The development comes at a time when Shelter Afrique is fighting off allegations of mismanagement and that it has overstated its asset quality. The allegations forced its erstwhile Managing Director James Mugerwa to step aside earlier in the year. Following the allegations, the firm commissioned a forensic audit, leading to recommendations of policy improvements.
Promising negotiations recently, the struggling firm also revealed that other shareholders had made commitments to make their contributions before the end of the year. Ghana, Kenya, Morrocco, Namibia, Nigeria, Rwanda, Senegal, Swaziland and Zambia committed to make their contributions totalling $47 million before the end of June. It is understood the company is actively courting Class C shareholders – a new category of shareholders, which was passed by the General Assembly in January. It is said to have begun promising negotiations with some interested parties.
Mr Adewole said shoring up the firm’s financial base is in line with its turnaround plan and follows recommendation of the independent forensic report, which was commissioned by the board. Last year, at least 59 per cent of Shelter Afrique’s $246.3 million loan book was classified as non-performing.