Home Afrika drops Kisumu, Kwale projects on cash hitch

Home Afrika drops Kisumu, Kwale projects on cash hitch

Home Afrika chief executive Dan Awendo. FILE PHOTO | NMG Property developer Home Afrika #ticker:HAFR is set to raise more than Sh600 million by exiting two projects in Kisumu and Kwale, which it was unable to complete due to inadequate capital.

The Nairobi Securities Exchange-listed firm is set to sell its land holdings in Kisumu’s Lakeview project and is also in talks to cede its interests to investors who had bought land in Kwale’s Lango project.

“We are looking for buyers for our land in Lakeview. We are also in talks with Lango investors as we seek to exit the project,” Dan Awendo, Home Afrika’s chief executive, told the Business Daily yesterday.

“We are prioritising the completion of Migaa, which is where the money raised from the exits will be deployed.”

He said the company would book capital gains from the property sales. The current market value of the land at Lakeview, which has 97 acres, is Sh4.5 million per acre, according to Mr Awendo.

This places the expected gross proceeds from the project’s disposal at some Sh436 million. Home Afrika had planned to build 600 homes and a hotel in Lakeview through a joint venture

The asking price at Lango, which has 21 acres, is Sh12 million per acre.

This puts the project’s value at Sh252 million though Mr Awendo added that not all the consideration will be in cash when the company unwinds its investment in Lango where some 100 apartments were to be built.

Home Afrika has struggled to complete its various capital-intensive real estate developments, with plans to raise billions of shillings from debt and equity sources having stalled.

Lenders have been leery of the company’s financial strength, with some sidestepping its debt calls and others providing funding at steep interest rates.

The loss-making company’s share price also collapsed from a high of Sh25 to yesterday’s Sh0.65, assigning it a market value of Sh263 million and making it difficult to raise new funds from selling shares.Home Afrika says investors are discounting the current market value of its land holdings, adding that it only carries them at cost.“We know it as factual that our market capitalisation is not reflective of our balance sheet size, especially if the current land market values are factored in,” the company said in its latest annual report.“This is because our inventory in the balance sheet is carried at cost and not the market value. This is in line with IFRS reporting […]

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