NHCC sells shares to raise capital - Daily Monitor

NHCC sells shares to raise capital

Friday August 5 2016

By NELSON WESONGA

WAKISO.

The government, which is the majority shareholder in the National Housing and Construction Company Limited (NHCC), wants other shareholders in the company.
It says that would improve NHCC’s balance sheet and enable it to finance its projects.

Currently, other than the government, the other shareholder is the Libyan government, which has a 49 per cent stake.
Mr Patrick Ocailap, the deputy secretary to the Treasury, said on Wednesday in Kira Municipality, Wakiso District, that presently, NHCC might not even have enough money to meet its recurrent costs.

“We need to introduce new players into the shareholding structure to attract the money we need to cover all these projects,” he said.
Mr Ocailap, who was speaking during the groundbreaking ceremony for the construction of NHCC’s Jasmine condominiums, did not say if the government would offload some of its shares.

The condominiums will be built at a cost of Shs19 billion and NHCC will contribute Shs9.5 billion. Tropical Bank will lend NHCC the rest of the money, which NHCC has to repay in five years at an interest of 20 per cent.

Construction, which will be undertaken by NHCC, will start later this month and will be complete in 13 months.
On completion, a four–bedroom condominium will cost Shs480 million while a three–bedroom one will cost Shs430 million.

“These are luxury units. Unfortunately for many people, they are unaffordable,” NHCC chief executive officer Parity Twinomujuni told Daily Monitor, adding: “But we have something for low–income earners. We shall later in October start constructing low–cost houses in Bukerere in Wakiso District.”

Though Mr Twinomujuni says the condominiums in Bukerere will be low–cost, a unit will cost between Shs00 million and Shs120 million for a two–bedroom and a four–bedroom apartment.
According to a Federation of Uganda Employers report, on average, a Ugandan worker earns Shs500, 000 monthly.

With that net salary and no other demands, one would clear a Shs100 million mortgage in about 17 years.

Background

1964. NHCC was established to construct houses
2002. Government sold 49 per cent of NHCC to Libya African Investment Company.
Over the years, it has constructed houses in Arua, Entebbe, Gulu, Hoima, Kabale, Jinja, Lira, Masaka, Mbale, Mbarara, Moyo, Soroti and Soroti.
According to Wikipedia, as of 2011, NHCC had assets valued at least $70 million (Shs236 billion at today’s exchange rate)

Advertisement