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Officials at the state-owned Development Bank of
Ethiopia (DBE) seem to have made up their minds to
repossess one of the capital’s landmarks, Dembel
City Centre, in their bid to recover 221.4 million
Br the Bank claims from the developer, Yemiru Nega.
A major shareholder and general manager of Yencomad
Construction Plc, the prominent businessman took 186
million Br in loans from DBE 10 years ago to build
the largest shopping centre Addis Abeba has today,
on Africa Avenue (Bole Road). The vast structure
with a blue-glass facade gracefully stands on an
8,000sqm plot, housing 114 shops and offices, after
it was opened in 2001.
The head office of Wegagen Bank is housed in this
building, occupying the sixth and seventh floors,
while others banks such as the Commercial Bank of
Ethiopia (CBE) and Nib International Bank have
branches inside. There is also an expansion in
progress that includes, among other things, parking
facilities under construction in a southern wing.
DBE wants to foreclose the 12-storey building held
as collateral against the loan. It is the first time
the Bank has made such a forceful move, although a
letter of foreclosure notice was issued to the
developer six months ago, sources disclosed. Yemiru
has proposed a recovery scheme where he would pay
two million Birr for the first month and a series of
five million Birr payments in the subsequent months,
until such time that he pays back the 25.3 million
Br arrear in interest.
He paid the first instalment two weeks after both
parties had agreed on a recovery plan. Officials at
the Bank claim that he has interrupted servicing his
debt since then, a reason that prompted Getnet
Temechew, head of the Legal Department, to write a
letter - on November 12, 2007 - to the Land
Development and Administration Department of Cherkos
District. He requested the Department to organise
officials of Kebele 20, where the building is, and
the District’s Police Department to enforce the
takeover of the building.
“The Bank has decided to sell the property held as
collateral to pay for the debt,” says the letter.
“We request for your customary cooperation so that
the developer hands over the building with no
precondition.”
The Bank wants to take the building away from the
developer on December 6, 2007.
If pursued by DBE officials, it will be a major loss
to the businessman who made his fortune from textile
wholesale at a stall found in Mercato, which he has
owned since the early 1970s. Yemiru was also one of
the 10 developers granted plots free of lease in the
early 1990s and secured the plot where Dembel lays
in 1994.
He has also installed a plant that crushes rocks at
a place commonly known as Yerer Ber before he
began construction of Dembel City Centre, which
consumed an investment of over 300 million Br.
Yemiru established Yencomad Construction, which
carried out the construction works of Dembel itself,
at a capital of 56 million Br. The firm became one
of the domestically growing companies mainly
involved in the road construction sector.
“I will continue to service my debts according to
the recovery plan,” Yemiru told Fortune. “I
neither know nor understand why all of a sudden the
Bank decided to take over the property, when I was
out of the country on a business trip. The delay
from my part was as a result of my absence. I will
settle it next week.”
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