KCB, Equity bank units seek receivership of Kigali Business Centre
THURSDAY JULY 21 2022
Kigali skyline. Banks are seeking to place Kigali Business Centre under receivership over $16 million loan. PHOTO | SHUTTERSTOCK
By MOSES K. GAHIGI
More by this Author
Rwandan subsidiaries of Kenyan banks KCB and Equity are seeking to have Kigali Business Centre placed under receivership for defaulting on a $16 million loan owed to the two lenders.
BPR Rwanda – a subsidiary of KCB after the merger of KCB Rwanda and BPR – and Equity Bank Rwanda have requested the Registrar General at Rwanda Development Board (RDB) to put the shopping complex in Kigali under statutory management to protect their interests.
BPR Rwanda chief executive officer George Odhiambo told
The EastAfrican that the lenders settled on receivership after other efforts to recover their money from the building owners failed.
Kigali Business Centre (KBC) is one of the newest prime shopping complexes to be added to the Kigali skyline. It is located at an affluent city intersection with other premium amenities like Kigali Heights, Kigali Convention Centre (KCC) and Radisson Blu hotel.
The shopping complex hosts furniture and clothing shops, entertainment spots, and BPR and Equity bank branches.
But despite its near full occupancy, the property owners have been unable to repay the $16 million loan owed to the two lenders, which prompted the banks to set the receivership process in motion.
“We are not foreclosing KBC as reported. BPR and the bank we co-financed the project have just applied for receivership as per the law; that’s where the matter stands,” Mr Odhiambo said.
“There have been several efforts from the side of the bank like giving a moratorium-a grace period, restructuring the loan, but nothing has changed,” he added.
RDB arbitration
He said the two banks have been engaging RDB, including asking the board to talk to the borrower to meet his obligations and arbitrate between the lenders and the borrower.
“The property has occupancy, and the tenants have been paying rent, including BPR, which is one of the tenants, but the loan is not being paid. The customer did not only fail to honour commitments to the banks but to RDB as well,” he said.
Mr Odhiambo noted that the ball is now in RDB’s hands to approve the receivership request and appoint a receiver manager.
KBC ownership
Kigali Business Centre is owned by Charles Mporanyi, one of Rwanda’s consummate career businessmen. He built the complex after selling his insurance company Soras, Rwanda’s second oldest insurer, to South African giant Sanlam. It was to be his swansong after a long career in corporate Rwanda.
The developments have left many wondering what could have gone wrong for the businessman as there had barely been any signs of distress at KBC given its high occupancy rate, save for Covid-19 pandemic shocks.
The EastAfrican could not get a comment from Mr Mporanyi, but an inside source said that the problems the property is facing now are rooted in governance issues due to interference by the businessman's children.
“The property has a high occupancy rate, north of 80 percent – higher than most players in the market. There is a bit of default by a few tenants but not alarming,” the source added.
Mr Odhiambo said KBC is currently valued at around $23 million, adding that the lenders are not hell-bent on foreclosure.
“Banks do not enjoy this process. If the customer starts paying, all this will stop,” he said.
Commercial real estate is one of the sectors with high non-performing loans in Rwanda. According to data from the central bank, the sector NPLs between December 2020 to March 2021 grew from 7.5 percent to 16.7 percent.
Rwandan subsidiaries of KCB and Equity seek to have Kigali Business Centre placed under receivership for defaulting on a $16 million loan.
www.theeastafrican.co.ke
VS
Equity Group arm to build Kigali Financial Towers in $100m investment
TUESDAY JUNE 21 2022
Equity Group chairman James Mwangi with Rwandan President Paul Kagame and other officials at the ground-breaking ceremony of the Kigali Financial Square. PHOTO | RDB
By BERNA NAMATA
More by this Author
Equity Bank Group is set to fund to a tune of $100 million the construction of Kigali Financial Towers through Equity Holding (EH) Venture Capital.
EH is the investment arm of the Nairobi-headquartered regional lender. The towers are some of the buildings of the Kigali International Financial Centre (KIFC) to host key financial institutions in the country including global investment banks that Rwanda is targeting to attract.
The groundbreaking ceremony took place on Tuesday in Kigali on the sidelines of the Commonwealth Business Forum and was officiated by Rwandan President Paul Kagame.
“Rwanda has an ambition of becoming a financial hub and Equity’s transformational flagship projects are aligned to this agenda. Equity and all those investing in our country have our full support.
I assure all investors that every dollar you invest in Rwanda will pay back,” President Kagame said.
The project located in Kigali City centre is expected to be completed within two years.
Rwanda launched its ambition to build a financial hub in 2020 and hired international finance experts including Ivorian banking titan - Tidjane Thiam, ex-boss of Credit Suisse, who is currently the chairman of the board of Rwanda Finance, the company responsible for promoting and developing KIFC.
Speaking at the Commonwealth Business Forum, James Mwangi, the chairman of Equity Group, said the Covid-19 pandemic exposed the current economic and social order and its unsustainability.
“It demonstrated to the world how unstainable the world had been built. The business had lost trust with the host community; inequality had reached a level unprecedented in history. Globalisation, competitiveness, economies of scale; the theories upon which the world was being built have been put to question because, at the end of the day, it was all about availability,” Mr Mwangi said, adding that personal protective equipment (PPEs) and vaccines were not available in Africa when they were needed.
“The priority is to focus on agricultural productivity, let's convert Africa's arable land into productive agricultural land and hopefully stem the food inflation that has confronted the world,” he said.
KIFC announced in November 2021 the launch of the Virunga Africa Fund, an investment vehicle of $250 million focused on impact investing and jointly funded by the Qatar Investment Authority and the Rwanda Social Security Board.
The groundbreaking ceremony took place on Tuesday in Kigali on the sidelines of the Commonwealth Business Forum.
www.theeastafrican.co.ke
