The weekly roundup of Africa's Private Capital news
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Here's the latest digest of the most noteworthy private equity, venture capital and infrastructure financing deals and investment insight and news stories related to Africa that were published over the last seven days. We'd be delighted if you shared it with interested colleagues and/or partners, so please feel free to forward the newsletter on to them. If they would like to receive their own weekly copy they're more than welcome to sign up here.
We're trying to make this as useful a tool as possible for Africa-focused private capital investment professionals and their advisers. Let us know what you think. Send tips, suggestions and feedback to me at [email protected].
Many thanks for reading.
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The week in brief...
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AIM-listed investment group, Blackstar made a splash at the beginning of last week with announcements of two deals. Firstly, in a move that will lead to a name change and a shift to the big boards on both the Johannesburg and London stock exchanges when the deal closes, it is taking a 22.9% stake in Kagiso Tiso Holdings in a reverse cash and share deal worth R2.06 billion or $180 million. Blackstar CEO Andrew Bonamour would be the CEO of the newly re-named Tiso Blackstar, with Tiso co-founders David Adomakoh and Nkululeko Sowazi assuming chairmanship roles in the new group.
Already a significant shareholder in South Africa's Times Media Group, Blackstar also made an offer to acquire the remaining 67.5% of the media firm it does not already own for approximately $43 million. CEO Bonamour fills the role of CEO of TMG also. Blackstar states it is unlikely to invest any more in TMG itself, but would likely look to use the company's future cashflows to fund investments in higher yielding opportunities for the new Tiso Blackstar. TMG's board is considering the deal.
In other deal news last week, real estate investment firm RMB Westport is teaming up with Trojan Estates for the $170 million development of the upmarket Royal Gardens Mall in Lagos. Due to break ground in 2015, the 30,000 square meter retail and entertainment complex will be the largest in Africa once it is completed in 2017. It'll be situated next door to Royal Garden Estates, a high-end residential development and will appeal to luxury retailers looking to sell their products to Nigeria's rapidly growing and aspirational middle class. Across the continent, in another high-end property development deal news item, Vantage Capital is committing $10 million in mezzanine debt funding to Uganda-based Simba Properties Investment Company. Part of the privately-held Simba Group, the developer's portfolio holds a mix of hotel, office and residential properties. The deal represents Vantage's first deal in Uganda and its twelfth from its second fund, which is now 85% committed. The fund expects to close its third mezzanine fund at $250 million in early 2015.
As the year draws to a close, the DFI sector was especially active last week, signing off on grant and loan approvals for a number of projects. In a resurgent Cote d'Ivoire, the Port of Abidjan has agreed terms for an $875 million loan from China Eximbank. As one of Africa's busier ports, it needs to build a second container terminal and other assets. Construction will begin in 2015 with an expected completion date in 2021. Meanwhile, OPIC's board of directors approved $233 million in financing to support the construction of Kenya's 100MW Kipeto Wind Power Project. General Electric looks set to begin construction on the wind farm in 2015, which will take approximately two years to complete. And finally, the African Development Bank has granted Zimbabwe $108 million to improve water and electricity supplies in the country. In hock to the tune of $9 billion to foreign creditors, Zimbabwe still has difficulty raising fresh loans for the infrastructure projects it desperately needs.
Public Investment Corporation, the South African government-owned pension fund with $139 million in assets, made a number of headlines last week. Firstly, Daniel Matjila, the fund's chief investment officer, was named as the fund's new CEO, with immediate effect, replacing Elias Masilela who resigned unexpectedly in May. Secondly, one of its portfolio's assets, unlisted cement maker Afrisam Group, sent a merger proposal to larger rival PPC, in a bid to become a significant force in Africa's cement manufacturing landscape. And thirdly, Reuters reports that PIC is teaming up with SasOil Holdings and Mozambique government-owned IGEPE to explore the feasibility of building $6 billion gas pipeline between the Mozambique and South Africa.
Continuing with the energy theme, we wrap up the week in brief with an interesting piece in The Guardian. By some estimates, Africa needs $288 billion in energy investment if the goal of providing universal access to electricity by 2030 is to be achieved. Progress to date has been slow, but a review of the steps taken by Rwanda in energy infrastructure investment and development as part of its Vision 2020 policy gives Africa's governments a potential roadmap. Here's hoping they take it.
To read more about these and other stories in this active week, please scroll down and review the headlines, abstracts and links.
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Private Equity
Private equity firm Blackstar announced on Monday that is taking a 22.9% interest in Kagiso Tiso Holdings in a reverse cash and stock deal worth R2.06 billion or about $180 million. The new company created by the merger will be known as Tiso Blackstar which will seek to move its listing to the main boards of the Johannesburg and London Stock Exchanges once the deal closes.
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Private Equity
Private equity real estate investment management and development firm RMB Westport is teaming up with Trojan Estates to develop the 30,000 square meter high-end Royal Gardens Mall in Lagos. The funding will be made through RMB Westport's Real Estate Development Fund. The mall, which will be situated next to the up market residential Royal Gardens Estate, is scheduled to open in 2017.
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Private Equity
Blackstar is offering to acquire the shares it does not already own in South Africa's Times Media Group in a cash and share deal. According to Bloomberg, the offer values the company at $244 million, although the cash portion of the offer will not exceed R500 million, approximately $43 million, with the balance being settled in new Blackstar shares. While Times Media has "limited scope for future investment" according to Blackstar, its future cashflows may be used for a strategy of investment in more profitable opportunities.
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Private Equity
Vantage commits $10mln mezzanine funding for Simba Properties
Vantage Capital has agreed to provide $10 million in mezzanine debt funding to Simba Properties Investment Company, the property investment and development arm of Uganda-based Simba Group. The deal, which is Vantage's first in Uganda, is the twelfth mezzanine transaction from the firm's second fund, which is now 85% committed.
Contact...
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Private Equity
Amethis Finance is joining with Retail Holding to acquire a stake in CDCI, Cote d'Ivoire's second largest food distribution company. Terms of the deal were not reported. The deal links CDCI with another large food distributor in Morocco, Label'Vie, which is owned by Retail Holding. Having expanded considerably over the last decade, CDCI is looking to benefit from the expected expansion in Cote d'Ivoire's middle class.
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Venture Capital
AIM-listed venture capital firm BP Marsh & Partners has invested in South African reinsurance brokerage startup Bastion Reinsurance Brokerage. BP Marsh is spending $157,000 for a 35% cumulative preferred shareholding, and offering an additional $538,000 in additional loan funding once the deal has closed and certain conditions have been met.
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Venture Capital
UK private equity firm Zouk Capital is joining NASDAQ-listed SolarCity and Vulcan Capital in a $16 million investment round in Tanzanian-based solar startup Off Grid Electric. The company previously raised $7 million in March this year. Off Grid plans to expand its installation workforce and improve its hardware and software capabilities in a bid to grow its userbase from 25,000 to 100,000 customers.
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RMB Westport teams with Trojan Estates to develop $170 million Royal Gardens Mall in Lagos
Image Credit: RMB Westport
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Infrastructure
Angola earmarks $1.6bln for infrastructure fund // ft.com
Angola's $5 billion sovereign wealth fund is earmarking $1.6 billion for investments in hotels and infrastructure in sub-Saharan Africa as it seeks to diversify its portfolio in the face of declining oil prices. The fund plans to allocate $500 million to investments in hotels and other greenfield developments, with the remaining $1.1 billion targeted at transport, energy and other infrastructure projects.
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DFI
China Eximbank has loaned Cote d'Ivoire around $875 million to build a second container terminal at Abidjan port, one of the busiest in Africa. Work will begin on the development of the container terminal, the widening of a canal and the construction of a roll on/roll off terminal in 2015 and is expected to take 6 years to complete.
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DFI
OPIC's board of directors approved $233 million in financing to support the construction and operation of Kenya's 100MW Kipeto Wind Power Project last week. General Electric will start to build the wind farm, which is located some 70kms south west of Nairobi, in 2015.
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DFI
A part of IHS's $2.6 billion capital raise in November, the IFC has loaned the tower company $200 million. The capital will be used to fund part of the acquisition of Etisalat's portfolio of telecom towers in Nigeria.
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DFI
Zimbabwe has received a $108 million grant from the African Development Bank to fund improvements in electricity and water supplies in the country. The country owes foregin creditors $9 billion which limits its ability to access fresh loans to improve its infrastructure assets.
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Projects & Portfolio Companies...
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Infrastructure
PIC teams with IGEPE, SasOil for $6bln pipeline feasibility project // reuters.com
Public Investment Corporation, the South African government-owned pension fund is teaming up with oil and gas exploration company SacOil Holdings and Mozambican government-owned IGEPE to study the viability of building a $6 billion gas pipeline from Mozambique to South Africa.
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Private Equity
BankABC's current management team is leaving at the end of 2014 and will be replaced by a team led by Simbarashe Ronald Pfende. Howard Buttery is also stepping down as Chairman of the group to be replaced, subject to regulatory approval, by Atlas Mara's CEO, John Vitalo.
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Private Equity
Cement maker Afrisam Group, majority-owned by Public Investment Corporation, has submitted a merger proposal to South Africa's biggest cement maker, PPC, last week. Details of the offer were not reported. PPC,whose stock has slipped in recent months, has said it is considering the proposal.
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Compliance & Regulation...
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Regulation
The African Private Equity and Venture Capital Association announced the launch of the newly-formed Francophone Africa Legal and Regulatory Committee on Tuesday last week. The committee will support AVCA's advocacy for private equity firms in french-speaking Africa, and will help in the development of technical and educational resources to assist its members do business in those regions.
Read more...
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Agriculture
Africa's agriculture investment approach needs change // wsj.com
Morocco's Agriculture Minister, Aziz Akhannouch, believes Africa's governments need to rethink their approach to encouraging investment in agriculture. Specifically, they need to be more adept at laying out the value proposition for investors. Under Morocco's "Plan Vert", agricultural productivity has been boosted 40%, a feat which he believes can be replicated by other government's adopting a similar approach.
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Credit
Low levels of private sector corporate credit hamper Africa's growth // ft.com
A guest post in last week's Financial Times by Enko Capital Management's Managing Partner Alain Nkontchou outlining the need for Africa's private sector corporations to take on more debt to finance investment, boost productivity and generate growth to support the expansion of the continent's population.
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Oil & Gas
The Nigerian government's privatization arm estimates that the country needs $113 billion in investment over the next six years if it is to "unleash" the country's oil and gas industry. The government is unable to finance all the requirements for the hydrocarbon, transport and power sectors, so is amending laws and regulations to facilitate private sector investment.
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Venture Capital
After a relatively quiet 2014, South African venture capital firm Silvertree Capital is planning to make more investments in 2015. As the fund seeks to espand its operations, it is looking at Nairobi for opportunities. To date the company has invested primarily in
e-commerce companies.
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Perspectives - Infrastructure
Africa needs $288 billion of investment in energy in order to achieve the goal of universal access to electricity by 2030, but, while progress is being made, it is painfully slow. This article takes a look at some of the factors getting in the way of the sector's development and studies the strategies Rwanda has in place for energy infrastructure as part of its Vision 2020 policy.
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Perspectives - Private Equity
At a panel discussion held last week by Imperial College's Private Equity and Venture Capital Club, panelists talked about the role of private equity in funding sustainable development. This piece summarizes the key elements of the discussion.
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Perspectives - Venture Capital
An interview with Heshan de Silva of venture capital firm DSG venCap discussing the state of play in Kenya's venture capital investment industry. He gives his view on the opportunities for agriculture and technology investors and what needs to change for people to realize the value in these opportunities.
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| Companies, People & Profiles... |
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CEO with immediate effect; Daniel Matjila takes the reins at PIC
Image Credit: Ventures Africa
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People News
Daniel Matjila, Public Investment Corporation's Chief Investment Officer, was appointed CEO of the government-owned pension fund with immediate effect last week. His term will last for five years.
Read more...
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Company News
Tech giant Microsoft, in partnership with venture capital accelerator 88mph, announced a partnership last week to expand Microsoft's Ventures program into Nigeria. The goal is to support startups by offering tools, resources, expertise and access to global markets. The move builds on the success of the organizations' partnership in Kenya, which launched in 2013.
Read more...
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Chief Strategy Officer for the African Development Bank
Based in Abidjan, Cote d'Ivoire
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Partner, Africa Investments at LeapFrog Investments
Based in Johannesburg, South Africa
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Investment Director for Pan African Investment fund
Based in London, UK
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Director, LeapFrog Labs at LeapFrog Investments
Based in London, UK
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Director, Value Creation at LeapFrog Investments
Based in London, UK
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Junior Private Equity Research Analyst for AVCA
Based in London, UK
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Head, Institutional Distribution for International Investment Bank
Based in Johannesburg, South Africa
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Associate for Global Private Equity firm
Based in South Africa
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Managing Director for African Private Equity firm
Based in Nairobi, Kenya
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Managing Director for African Private Equity firm
Based in Johannesburg, South Africa
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Deal Lead for Renewable Energy Investing at Google
Based in Mountain View, CA, USA
Read more...
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2015 SAVCA Annual Private Equity Conference
Stellenbosch, February 12th to February 13th, 2014
Read more...
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South African Impact Investing Conference
Johannesburg, February 16th to February 17th, 2015
Read more...
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2nd Annual Infrastructure Project Financing Africa
Cape Town, March 2nd to March 4th, 2015
Read more...
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12th Annual AVCA Conference
London, April 27th to April 29th, 2015
Read more...
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Global Private Equity Conference
Washington, DC, May 11th to May 14th, 2015
Read more...
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Africa Financial Services Investment Conference
Brighton, May 12th to May 15th, 2015
Read more...
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We hope you found the digest to be a useful summary of the major happenings in Africa's private capital markets last week. We'd love it if you shared it with colleagues and business partners. They can sign up for free here.
Best wishes for a productive week - if you have any tips, suggestions, questions or comments, please get in touch.
All the best,
- Allan
Allan Cunningham
Editor & Publisher
AfCD | Africa Capital Digest
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