When Mixta Real Estate, also known as Mixta Nigeria, went to the Nigerian Stock Market for the listing of its N4.5billion 17 percent Guaranteed Fixed Bond, the aim was to shore up its liquidity profile and facilitate the completion of its flagship affordable housing project due for delivery in 2018.
The bond, which was issued under the registered N30 billion medium term note programme with the guarantee provided by GuarantCo Limited – an AA-rated international credit enhancement company, will also be used to refinance the company’s existing debts.
“By listing on the Nigerian Stock Exchange, we are optimistic that this initiative will provide us with a platform to continue raising capital in a cost-effective and efficient way as the need arises while also enhancing our public profile locally and globally”, explained Kola Ashiru-Balogun, the managing director.
He hopes that this new development will birth effective price formation, and access to transparent pricing and trading information that will further strengthen the confidence shareholders, stakeholders, and investors have in the company and in their quest to bridge the housing gap in Nigeria.
Offering insights on their mission to NSE, Ashiru-Balogun said the company found out that in order to embark on expansion plans, they needed to align with institutional investors that have the liquidity and the financial capacity to invest. “You have the pension fund administrators (PFAs) and insurance companies that can invest”, he said in an interview.
Continuing, he said, “we needed more funding to be able to roll out projects. The main thing actually was to enable us increase our liquidity position and we have been successful in that. We did a registration for N30 billion and we have started with the first phase of N5 billion which we succeeded in closing by the first quarter of the year and that has now been listed on the Nigerian Stock Exchange”.
The managing director was however surprised that a lot of people didn’t know who Mixta Nigeria was, though they knew ARM Properties, which was why they spent a lot of time educating the people on their name change and their previous plan. “People liked our story and that was why we were able to complete the first tranche of the fund raising of N5 billion”, he said.
The acquisition of Mixta Africa by ARM, Mixta Nigeria’s parent company, was aimed to increase the company’s expertise and capacity to deliver housing to the market. It was also aimed to enable them to restructure and focus on delivering affordable housing.
Consistent with this, the company has, in the last two years of this acquisition, rolled out projections aimed to deliver affordable houses to the property market. “We have plans to go to Abuja but we are still being very watchful. We don’t just do developments, we try to build a town. So, I need a minimum of 150 hectares of land so that from there I will be able to offer service to different classes of people”, Ashiru-Balogun informed.
In Lagos alone, they have three projects and are in Port Harcourt where they have acquired 200 hectares of land. Within this parcel of land, they have created a portion for a golf course and another portion for affordable housing. “We have started work on the golf course and also on some houses. By the third quarter of next year, we will deliver some of the houses. We also sell land there and a plot goes for N22 million”, he said, disclosing that each of the houses, which are mainly stand-alone houses and duplexes, sells for N50 million.