Enko Capital Starts $200 Million Bond Fund Focused on Africa

Enko Capital Management LLP is starting a $200 million bond fund that will focus on African sovereign and corporate debt to provide investors with yields higher than those available in developed markets.

African and European institutions are backing the fund, which aims to eventually raise as much as $1 billion, and has so far invested in Zambian, Ghanaian and Nigerian government bonds, Alain Nkontchou, managing partner of Enko Capital, said by phone from London. Enko seeks to invest in sub-Saharan debt outside of South Africa with three- to four-year terms and annual yields of 8 percent to 10 percent in dollars, he said.

“The lack of money coming into Nigeria and Africa generally has led to decent spread conditions that are a good opportunity to invest,” said Nkontchou, 53. “Nigeria has room to expand its borrowing because its debt stock is actually low compared to the economy.”

It only considers corporate debt backed by collateral, strong cash flows and decent credit ratings, he said. The firm also manages a $76 million private-equity fund invested in financial companies in Nigeria where valuations are attractive, said Nkontchou. It runs a $20 million stocks fund invested in listed African companies deemed ready for growth, such as agriculture and consumer-facing business in Kenya and Ivory Coast, he said.
Source: Bloomberg

8 Miles backs African tropical fruit producer

8 Miles, a pan-African private equity firm, has invested in Blue Skies, a UK-incorporated business with operations in several African countries that is the leader in the production of fresh-cut tropical fruit for European supermarkets.

Financial details of the transaction were not disclosed.

The investment gives 8 Miles a significant minority stake alongside the founder investors and management team.

Blue Skies produces premium quality shelf-ready fresh-cut fruit and freshly squeezed juice products which it supplies on a daily basis to various European retailers.

The company was founded by Anthony Pile in 1997 with the philosophy of “fresh from harvest fruit” and “adding value at source”.

It currently has operations in Ghana, South Africa, Egypt, Brazil and the UK, employing more than 4,000 people.

Among some of the fruits processed are pineapple, melon, kiwi, papaya, mango, grape, citrus, banana and lychee.

Doug Agble, Partner at 8 Miles, said: “This is an exciting opportunity to partner with a highly successful founder and a top-quality management team who have built a business based on solid and unique foundations. We aim to support Blue Skies in their continued growth and help them develop their brand across Africa.”

The investment will help the company to expand its core fresh cut fruit business, increase production capacity in South Africa, launch a fresh juice operation in Egypt and develop new product lines for some of its markets in Africa.

Anthony Pile, Chairman and founder of Blue Skies, said: “We are pleased that 8 Miles have joined us. They are fully aligned with the core values of Blue Skies and their deep understanding of African markets and extensive networks will help us in this exciting phase of growth”.

Blue Skies was advised by Gerald Couldrake and Matthew Thompson from Howes Percival LLP, and Mike Brown and Craig Chamberlain from MacIntyre Hudson LLP.

8 Miles was advised by Simon Tinkler and Danny Mutisya from Clifford Chance, and Sandip Shah and Andrew Maxwell-Scott from KPMG.

8 Miles LLP is regulated by the UK Financial Conduct Authority and the Fund is only open to institutional and qualified investors. Source: Africa Global Funds

CDC and AgDevCo in $11.5 Malawian agriculture deal

CDC, the UK’s development finance institution, and AgDevCo, a social impact investor targeting sub-Saharan Africa, have invested $11.5m in Jacoma Estates Group to expand its Malawian farming operations.

Daudi Lelijveld, CDC’s Investment Director, said: “CDC’s investment in Jacoma will boost agricultural growth and poverty reduction in Malawi. Jacoma plays a vital role in Northern Malawi, providing good quality jobs, as well as new markets for local farmers.”

The new financing – $8m of equity from CDC, and $3.5m from AgDevCo structured as debt and preference shares – will help Jacoma expand its farming operations at its Tropha Estates in Northern Malawi, where it produces high value macadamia nuts, chilli and paprika.

The funding will also provide up to 100 hectares of year-round irrigation to local smallholder farmers, extend existing outgrower schemes and further strengthen the company’s impact in neighbouring communities.

In a country where farmers face significant challenges from climate change, lack of access to international markets and low-quality yields, the new investment will enable a further 1000 local farmers to reach export markets and benefit from a company scheme that provides yield-boosting seeds and other agricultural inputs.

Chris Isaac, AgDevCo’s Investment Director covering Malawi, said: “Jacoma is a good example of the benefits a socially-responsible agribusiness can deliver to local communities. We are particularly pleased that irrigation will be extended to smallholder farmers in an area prone to drought.”

The new financing for Jacoma, which follows a recent $0.5m investment from the African Agriculture Capital Fund, is expected to create at least 350 new jobs and bring about climate-smart agricultural practices that allow local smallholders to manage resources better and protect themselves from extreme climate change.

Duncan McDavid, CEO of Jacoma, said: “Malawi is a high-quality macadamia nut producer. With investment in irrigation and processing we can help the country further build a globally competitive macadamia industry. Smallholders can play an important role in the value chain. This will in turn give their families a reliable source of income. This investment is an important step in making this vision a reality.”

AgDevCo provided a $2m loan to Tropha Estates in November 2014, enabling the company to install irrigation and plant an additional 370 hectares of macadamia trees on its farm near Mzuzu in northern Malawi. An on-farm macadamia processing factory is nearing completion.

CDC’s investment will be accompanied by an additional technical assistance grant that will help Jacoma have greater development impact to become a model for sustainable agriculture and social management.

The grant will initially support the company to strengthen its environmental and social practices, helping it reach international standards designed to support smallholders, including climate smart agriculture and efficient irrigation infrastructure that helps improve yields and enhance resilience.

Tropha has also established a successful outgrower scheme for chillies and paprika which engages with over 4,000 smallholder farmers.

With a separate working capital loan from AgDevCo of $450k the company provided seeds and training to farmers and purchased 540 tonnes of their produce over the past three years, injecting more than $900k into the local community.

The chillies and paprika were sold to international clients in South Africa and Europe.

With grant support from AgDevCo’s Smallholder Development Unit, which is backed by the MasterCard Foundation, Tropha is expanding the outgrower programme for macadamia trees.

The company is already enrolling and training farmers and will distribute over 50,000 seedlings (which have been grown on the farm in a high quality nursery) during 2017. Source: Africa Global Funds

Côte d’Ivoire govt agrees to sell 25% Ity stake to owner-operator Endeavour

Côte d’Ivoire State-owned mining company Sodemi has agreed to sell its 25% stake in the Ity gold mine back to Canadian gold miner Endeavour Mining.

President Alassane Ouattara approved the State miner’s sale of ownership in the mine in a Cabinet meeting on Wednesday morning. Following the transaction, Endeavour will own 80% of Ity, with the government of Côte d’Ivoire holding a 10% interest and the Drogba Group, which is associated with former Chelsea football star Côte d’Ivoire-born Didier Drogba, the remaining 10%.

Endeavour said the commercial terms of the transaction remain to be finalised.

The TSX-listed company has previously stated it needs to conclude discussions of Ity ownership before making a final investment decision on the proposed Ity carbon-in-leach (CIL) gold project.

A feasibility study on a nearly $300-million CIL expansion project has demonstrated the potential for the mine to become a long-life, low-cost flagship asset.

Over the expected 14-year mine life, based on current reserves, the expansion will lift output 31% to 1.9-million ounces, compared with the September 2015 prefeasibility study. Upside potential remains with further conversion of known resources, inclusion of new discoveries and ongoing exploration on several near-mine targets.

The mill size has also increased from two-million tonnes a year to three-million tonnes a year, lifting yearly output. Source: Mining Weekly

Sanlam to buy PineBridge East Africa

Sanlam has agreed to buy the East African business of PineBridge, the leading global multi-asset class asset manager.

Sanlam Emerging Markets chief executive officer Junior Ngulube said on Wednesday the acquisition of the company with operations in Kenya and Uganda would enable the group “to build a leading position in institutional, affluent and retail investment management across East Africa”.

The Sanlam Group, a financial services provider with a market capitalisation in excess of $11-billion, has operations in 34 African countries.

Anthony King, regional chief executive at PineBridge Investments, said the company had sought a partner in Africa “with a strong local heritage” in order to maximise future business growth as well as to honour fiduciary, client and employee agreements.

“Sanlam is a respected brand with a compelling regional footprint that will offer financial strength and further access to local investment opportunities,” he added.

Ngulube said the transaction was expected to unlock synergies beyond asset management.

“As the business develops it will provide opportunities to expand geographically and develop other investment products.”

The transaction is subject to regulatory approval. Source: ENCA

Nigeria Sells Nationalized Lender Keystone Bank to Local Buyers

Sigma Golf Nigeria Ltd., Riverbank Investment Resources Ltd. are “the new investors” following regulatory approval, Asset Management Corp. of Nigeria, which took control of lender, says in emailed statement.

* Sale process started with expression of interest by 18 local and international investors;
* Transaction subject to fulfillment of “the conditions precedent as stated in the Share Sale and Purchase Agreement’’;
* NOTE: Jan. 6, 2016, Amcon of Nigeria Seeks Advisers for Sale of Keystone Bank. Source: Bloomberg

AXA, ACA, IFC in $82mln healthcare deal

A group of investors are backing a greenfield hospital development in Lagos sponsored by AXA Mansard Insurance. Private equity investor African Capital Alliance and the IFC, the World Bank’s development finance institution, are among them.

The cost of the development is expected to reach $82 million, 50% of which will be funded in equity and 50% which will be funded in debt. When finished, the AXA Mansard Hospital will consist of a 150-bed multi-specialty hospital and two 10-bed primary healthcare centers. The hospital will be located in Lekki, with one clinic on Lagos Island and the other on the mainland.

African Capital Alliance, the Nigeria-based private equity firm, is expected to provide up to 40% of the equity via its CAPE IV fund, with AXA Mansard furnishing 20% of the equity. The IFC’s Board of Directors is considering an $8.2 million equity investment in exchange for a 20% stake in the project, and will meet to make its decision on April 30th.

The project is expected to be structured as a Mauritius-domiciled holding company which will invest in a Nigerian investment vehicle specially set up to develop the project. Source: Africa Capital Digest

Proparco invests $7mln in Oasis Africa Fund

Oasis Africa Fund, which is looking to raise $50 million to invest in small and medium-sized businesses in Côte d’Ivoire and Ghana, had received a $7 million commitment from Proparco, the French development finance institution.

Managed by Oasis Capital, the growth and venture fund founded by Matthew Adjei in 2009, Oasis Africa is the firm’s second investment fund, a successor to the firm’s $13 million Ebankese Fund which is now fully invested. The new fund will focus on making investments businesses providing essential services such as education, financial services, housing, healthcare, food services and hospitality. It’s expected that the fund will make combined equity and debt investments, with individual transactions ranging from $500,000 up to $5 million in size.

In September last year, the fund held $27 million first close, garnering commitments from a number of investors including the IFC, the Dutch Good Growth Fund and a number of Ghanaian institutions and individuals.

The capital is being provided by the social business facility of FISEA, an Agence Française Développement fund advised by Proparco. Source: Africa Capital Digest

ExxonMobil acquires 25% of giant Mozambique gas field in $2.8 billion deal

US oil major ExxonMobil has agreed to pay Italy’s Eni US$2.8bn (£2.3bn) for a 25% stake in a giant Mozambique field as the company looks at boosting its natural gas production.

Eni will remain the field operator of the Coral floating liquefied natural gas project and all upstream operations in Area 4, while ExxonMobil will manage the construction and operation of gas liquefaction facilities onshore.

Mozambique’s Area 4 licence has estimated reserves of 85tn cubic feet of gas, making it one of the largest gas discoveries in the world in recent years. Source: Asoko Insight

Kleoss Capital acquires a controlling interest in Debt Rescue for an undisclosed sum

The extent to which debt counselling has become a mainstream industry became evident this week when private equity firm Kleoss Capital announced that they had bought a stake in one of the largest debt counselling firms in South Africa, Debt Rescue.

Debt Rescue CEO Neil Roets said that after almost a year of negotiations, Kleoss Capital decided to come on board bringing with them a wealth of expertise and experience in the private equity field.

“We are delighted to have Kleoss Capital on board. We were impressed by their methodological approach to investing and thoroughness during the due diligence phase. We look forward to the strategic partnership and the invaluable inputs Kleoss Capital will be able to make in our already strong management team.”

Roets said their primary reason for selling a share of the business to Kleoss Capital was that Debt Rescue had reached the point where it was ready to spread its wings to bigger and better things.

“We have twice been voted the best debt counselling firm in South Africa by both the public and by the major role players in our industry which included the major banks.”

“By having Kleoss Capital on board, we have access to the brightest and the best minds who have the ability to assist us to build on our success and take the business to the next level. Kleoss Capital is also a 100% black owned and managed investment manager.”

Roets said Kleoss Capital approached them because they considered Debt Rescue a leader in their field and was of the view that the company offered significant growth potential.

Hale Matsipa together with Andile Keta and private equity practitioner, Zain Laher founded Kleoss Capital, a R1.2 billion growth equity fund, in 2014.

“We decided to join forces because we wanted to create a business where we could put the expertise that we had learnt in our banking environment to full use.

“We wanted an arena where deal sourcing, deal structuring, debt and capital raising and acting in an advisory capacity to clients who wanted to dispose of their businesses was our main focus.

“We were confident that we had the requisite skills and the experience to raise sufficient capital to get an investment business up and running by bringing our expertise to the table to grow whatever businesses we chose to invest in to create value for our investors.”

Matsipa said their ambition was for Kleoss Capital to be a multi-class investment manager in the alternative space.

“We look at a wide range of attributes such as the value of the companies, how much capital they need and what they plan to do with it to grow the business.

“We look at their transformation credentials and see how best we can help them to add value and ultimately sell it for a healthy profit.”

Explaining how they decided on which companies to invest in, Matsipa said the first thing they looked at was whether they could get a healthy return on their investment.

He said his company would work closely with the management team at Debt Rescue on a value-add basis.

“We believe Debt Rescue has a bright future and is ready for the next phase of its corporate life where we see the business growing to generate solid returns for our investors. We believe that in Debt Rescue we have a solid platform for improving the lives of the millions of over indebted South Africans. Source: Press Release

ADvTECH buys Cape Town based private school group

ADvTECH, a listed private education provider, has acquired Western Cape-based Elkanah House schools for an undisclosed sum.

The acquisition, which is still subject to due diligence and competition commission approval, will be held through The Independent Institute of Education (IIE), a wholly owned subsidiary of ADvTECH.

ADvTECH Group CEO Roy Douglas said: “This strategic acquisition further expands our footprint in the Western Cape. Together with our two Abbotts College campuses in Cape Town and the recent acquisition of Glenwood House in George, we now have eleven schools in the region.”

With more than 1,300 students and a built capacity for 1,500 students, Elkanah offers Grade 0 to Grade 12 at six schools on three campuses in Cape Town’s Blouberg and Sunningdale suburbs.

“Elkanah has a strong academic record and a Christian ethos. In 2016, its Grade 12 pupils achieved a 100% IEB pass rate and 171 distinctions,” ADvTECH said in a statement on Thursday.

With the addition of Elkanah, ADvTECH’s schools division will comprise of 90 schools, serving almost 27,000 pupils. Source: Business Tech

Foresight Solar aims to raise £50m; secondary list on the JSE

The specialist investment vehicle planning a secondary listing on the JSE has no investments in SA yet, but believes there could be opportunities in future

Foresight Solar Fund, the specialist investment vehicle that announced last week it would take a secondary listing on the JSE on April 3, will place shares with selected investors at 107.75p each to raise up to £50m, it said on Tuesday.

The JSE listing of the investment fund, with a portfolio of 18 power plants in the UK, marks the growing maturity of SA’s renewables sector.

According to the December quarter report from the Department of Energy’s Independent Power Producers office, by the end of December the government had procured 6,422MW of renewable power in seven bid rounds, of which 2,902MW had been connected to the grid.

Foresight Solar has no investments in SA yet, but believes there could be opportunities in future.

The pricing of Foresight Solar’s private placement is at a slight premium to its audited net asset value of 105.6p a share at February 23. The new shares would receive the interim dividend of 1.55p a share declared for the December quarter, which will be paid on May 5.

The placement price is equivalent to R17.24 at current exchange rates. The actual rand price will be determined by prevailing exchange rates when the placement closes on March 29.

The purpose of the listing and fundraising is partly to repay debt Foresight incurred on the acquisition of two solar projects in the UK, Shotwick and Sandridge. Foresight’s managers said there were more attractive acquisition opportunities in the UK’s solar market.

It is listing on the JSE because there are investors in SA with an understanding of the benefits of solar and other renewable investments, but because of foreign exchange controls they can only put restricted amounts into offshore renewable funds. The shares issued will be fully transferable between the UK and South African share registers. Source: BD Live