Pan-African housing development financier, Shelter Afrique, has extended $19.5 million (₦8 billion) line of credit to Lagos-based real estate firm, Mixta Real Estate PLC.
The seven-year facility with a moratorium of 24 months has been structured to co-finance Mixta’s affordable residential projects investments and for debt refinancing.
$9.75 (₦4 billion) will be used to co-finance 1,171 affordable housing units comprising on-going Beechwood Park project (187 units) and New Marula projects (984 units). The other $9.75 (₦4 billion) will be used to repay part of Mixta’s seven-month Commercial Papers raised from the capital market in a bid to reduce the aggregate Commercial Papers outstanding from ₦17.9 billion to ₦13.9 billion.
“The deal with Mixta Real Estate PLC is appealing to us because, in addition to addressing the development of affordable, it also it stimulates rapid growth in housing provision, re-invigorates the development of the mortgage industry, as well as incorporating a sustainable development finance solution that makes the sector attractive to financiers,” Shelter Afrique Ag. Managing Director, Kingsley Muwowo, said.
Commenting on the deal, Mixta Africa Executive Director and Chief Financial Officer, Mr Benson Ajayi, said enabling access to housing and home ownership at affordable prices is the company’s main priority.
“The funding from Shelter Afrique is a validation of Mixta Africa’s housing and infrastructure development credentials. We are pleased to receive this funding approval after a rigorous due diligence process. In addition to accelerating the delivery of sustainable and affordable housing, the transaction will also strengthen the company’s funding status. The Company is delighted about the support of Shelter Afrique and looks forward to working with Shelter Afrique to deliver on its affordable housing mandate across Africa,” Mr. Ajayi said.
Other projects
Shelter Afrique has had a long-term relationship with Mixta Africa dating back to 2014 when the Company extended $6 million to Mixta (formerly ARM Properties PLC) to co-finance the development of 13 blocks comprising 130 apartments and related infrastructures services for outright sale to the public. The project was successfully completed, and the loan fully paid back.
In March 2021, Shelter Afrique Board of Directors approved a corporate loan in the form of a line of credit of $13 million in favour of Mixta. The five-year facility was to be on-lent to Mixta’s Real Estate Development affiliates to fund the Group’s current real estate portfolio composed of three key housing developments programmes of 889 low to middle housing units in Morocco (371 units), in Senegal (162 units) and in Ivory Coast (356 housing units).
“We are jointly reviewing a few terms and conditions of this facility at the moment and loan agreements between the two parties are expected to be signed soon,” Mr. Muwowo said.
The facility is expected to directly impact more than 1,171 families and provide accommodation for more than 4,684 people (average size of households in Lagos is 3.8) and create at least 2,342 jobs.
