Italians offer NHE N$5bn loan deal
Country under 300 000 housing backlog
The housing parastatal says it has received other non-solicited propositions from other entities.
The country’s struggling housing parastatal has been offered a N$5 billion loan facility from an Italian construction consortium.
The National Housing Enterprise (NHE) is vital in Namibia’s quest to address the ever-increasing housing backlog - which stands at a staggering 300 000 - but it is facing financial troubles and a looming labour strike over wages after years of steep financial decline.
Namibian Sun understands the company has since opened its doors to potential funders in a bid to carry out its mandate. One such entity is Italian-based Maec 87 SRL, which last year dangled the loan deal in front of NHE.
The financing, if agreed to, would be payable over a 20-year period.
The term sheet, which Namibian Sun had sight of, indicates that the loan amount is to be backed by government and paid back annually at an interest rate of 0.5%. A term sheet is a non-binding agreement that shows the basic terms and conditions of an investment. It serves as a template and basis for more detailed, legally binding documents.
The term sheet was signed by NHE CEO Gisbertus Mukulu and the company’s chief financial officer Beverly Gawanas-Vugs on 14 July 2022. Mukulu denied signing the document, but confirmed having met with the Italians.
Unsolicited bid
Mukulu said the Italian firm made an unsolicited bid to the NHE, adding: “We only engaged with them. We had a consultation meeting for them to sell their company and product that they offer”.
On her part, the company’s spokesperson Tuafi Shafombabi confirmed that a bid had been presented but said no binding agreement had been signed.
“NHE has engaged Maec 87 SRL for funding purposes and signed a non-binding term sheet which forms part of the terms of engagement. Several funders have also approached NHE with their term sheets. Thus, no commitment was ever made from NHE,” she said.
Mukulu referred Namibian Sun to Maec 87 SRL, saying they were in a better position to provide comment on the proposed funding.
“Why don’t you contact them? It’s better you contact them. You ought to contact them,” Mukulu said.
Meanwhile, NHE board chairperson Sam Shivute said the board was unaware of the bid.
“The matter you speak about has not been submitted to the board for deliberations and approval. The board cannot have a position on a matter that was not deliberated by the board,” he said.
The Italian company was established in 2004, according to its company profile, and it currently operates in the rehabilitation and restructure of historical buildings in city centres.
Historical troubles
NHE’s financial statements had not been audited in four years, Shivute said in 2021, and added that efforts were underway to bring the enterprise’s financials up to speed.
He also acknowledged that the NHE was operating with limited financial resources as a result of “multiple factors that are disabling the institution to sufficiently generate revenue”.
A World Bank report previously laid bare the enterprise's inability to construct housing.
Since its inception in 1993 to mid-2019, NHE developed only 17 113 houses countrywide, many of which are two- and three-bedroom units, and few of which are affordable to lower-income groups.
“The NHE has focused most of its delivery on civil servants, but is increasingly focusing its projects down-market, with simple bedsits and one- and two-bedroom houses,” it noted.
The National Housing Enterprise (NHE) is vital in Namibia’s quest to address the ever-increasing housing backlog - which stands at a staggering 300 000 - but it is facing financial troubles and a looming labour strike over wages after years of steep financial decline.
Namibian Sun understands the company has since opened its doors to potential funders in a bid to carry out its mandate. One such entity is Italian-based Maec 87 SRL, which last year dangled the loan deal in front of NHE.
The financing, if agreed to, would be payable over a 20-year period.
The term sheet, which Namibian Sun had sight of, indicates that the loan amount is to be backed by government and paid back annually at an interest rate of 0.5%. A term sheet is a non-binding agreement that shows the basic terms and conditions of an investment. It serves as a template and basis for more detailed, legally binding documents.
The term sheet was signed by NHE CEO Gisbertus Mukulu and the company’s chief financial officer Beverly Gawanas-Vugs on 14 July 2022. Mukulu denied signing the document, but confirmed having met with the Italians.
Unsolicited bid
Mukulu said the Italian firm made an unsolicited bid to the NHE, adding: “We only engaged with them. We had a consultation meeting for them to sell their company and product that they offer”.
On her part, the company’s spokesperson Tuafi Shafombabi confirmed that a bid had been presented but said no binding agreement had been signed.
“NHE has engaged Maec 87 SRL for funding purposes and signed a non-binding term sheet which forms part of the terms of engagement. Several funders have also approached NHE with their term sheets. Thus, no commitment was ever made from NHE,” she said.
Mukulu referred Namibian Sun to Maec 87 SRL, saying they were in a better position to provide comment on the proposed funding.
“Why don’t you contact them? It’s better you contact them. You ought to contact them,” Mukulu said.
Meanwhile, NHE board chairperson Sam Shivute said the board was unaware of the bid.
“The matter you speak about has not been submitted to the board for deliberations and approval. The board cannot have a position on a matter that was not deliberated by the board,” he said.
The Italian company was established in 2004, according to its company profile, and it currently operates in the rehabilitation and restructure of historical buildings in city centres.
Historical troubles
NHE’s financial statements had not been audited in four years, Shivute said in 2021, and added that efforts were underway to bring the enterprise’s financials up to speed.
He also acknowledged that the NHE was operating with limited financial resources as a result of “multiple factors that are disabling the institution to sufficiently generate revenue”.
A World Bank report previously laid bare the enterprise's inability to construct housing.
Since its inception in 1993 to mid-2019, NHE developed only 17 113 houses countrywide, many of which are two- and three-bedroom units, and few of which are affordable to lower-income groups.
“The NHE has focused most of its delivery on civil servants, but is increasingly focusing its projects down-market, with simple bedsits and one- and two-bedroom houses,” it noted.
Comments
Namibian Sun
No comments have been left on this article