Investors reject planned N28.5b increase of NMRC equity capital

PLANS by the Nigeria Mortgage Refinancing Company Plc (NMRC) to raise additional equity capital of up to N28.5 billion have been halted, as investors queried the need for another equity issuance programme when the company should be consolidating its hold on the industry.

The investors, at the NMRC maiden Annual General Meeting in Lagos, noted that the authorised equity capital already paid off stands at 20 per cent and urged the NMRC management, led by Prof. Charles Inyangete, to work towards allotting the unsubscribed shares to other shareholders/investors rather than raising more funds.

About 22 mortgage firms and financial institutions are NMRC shareholders, including 17 mortgage banks, Ministry of Finance Incorporated, Stanbic IBTC Investments Plc and Sterling Bank Plc.

The institutions deposited over N7 billion for 1,762,500,000 shares. NMRC has also drawn $120 million from the International Development Association (IDA) facility as at July 2015 following compliance with the World Bank conditions.

However, the investors agreed that the issue should be presented at an extraordinary general meeting with additional facts on the use of the funds, especially information on the utilisation of the capital, to determine the veracity of the proposed equity capital.

They also sought the appointment of an independent chairman in the next three months to improve corporate governance. Chairman of the board, Dr. Ngozi Okonjo-Iweala, resigned in June 2015, with the Managing Director of Access Bank Plc, Hebert Wigwe, now the acting chairman.

Recently, he reportedly announced plans to sell shares to prospective shareholders before the end of the year to dilute its ownership, stating: “Our ideal scenario is to have every bank that is interested in providing mortgage financing to be part of it.”

However, Inyangete explained that the additional funds would be used for mortgage refinancing, information technology acquisition and market development as a means of revolutionising the mortgage landscape.

He noted that the standardisation of the primary mortgage lending process is ongoing, especially in origination, underwriting, closing and foreclosure, as well as the adoption and utilisation of uniform and standardised mortgage loan file documents.

“The continuing effort at standardisation is important for consumer protection, fairness and disclosure across all participating mortgage lenders,” he said.

According to him, six law firms – Detail Commercial Solicitors, Olaniwum Ajayi LP, G. Elias and Company, Ajumogobia and Okeke, Kunle Omotola and Company, and Perchstones and Graeys – completed the final draft of the model mortgage foreclosure law in February 2015.