Mpico owed K10bn in rental arrears

Property holding company Mpico Limited is owed K9 billion in rental arrears, a situation that is stifling operations of the firm.

The Malawi Stock Exchange-listed firm managing director Damieni Kafoteka confirmed on Tuesday that of the K10 billion, K9 billion is owed by government while K1 billion is owed by the private  sector.

He indicated that on the part of government, the arrears date back to two-and-half years ago while private tenant’s arrears date back to less than six months.

Kafoteka said: “We employ a lot of contractors, carpenters, builders…If our operations are stifled; it means we can’t assist these good Malawians who help us in our work.

Commenting on the business environment amid the Covid-19 pendimuc, he said: “Mostly, our business relies on our tenants and if they are struggling we cannot adjust our rentals to the level that is required.”

In its published trading sentiment on February 24 2021 signed by the firm’s company secretary Cosmas Katulukira, the group’s reported profit for the year ended 31 December 2020 is expected to be at least 40 percent lower than the previous corresponding period.

Thus, it said, “Is due to a late adjustment relating to a historical issue on which an expert opinion was only delivered late February 2021.”

However, in the year ended December 31 2019, its profit after tax increased to K7.6 billion from K6.8 billion in 2018, representing a year-on-year increase of 12 percent.

Government rent arrears, on the other hand, had worsened to K5.8 billion from K2.3 billion in 2018, and continued to negatively impact the Group’s operations.

Meanwhile, in a statement on Tuesday, the firm said it will evict tenants with unsettled rental arrears from April 16 2020.

In an interview on Tuesday, Minister of Lands Kezzie Msukwa indicated that promissory notes are being issued to Mpico and any other government creditors that are owed in excess of K100 million.

However, presenting his ministerial statement in March, the minister said the direction government want to take is to move all institutions to government buildings.

“This will save us a lot of government resources spent on rent.”

As at April 4, Ministry of Lands figures showed that government owed private landlords K15.3 billion in arrears.

Mpico has a current portfolio of 28 properties valued at over K35 billion.