Weekly Wrap December 22nd, 2014; Abraaj, Duet, GEMFonds make private capital news last week

The week in brief…December 22nd, 2014

As the year draws to a close and the holiday season in much of the world kicks into high gear, one might be forgiven for thinking that private equity, infrastructure financing and venture capital investment in Africa would have slowed to a trickle.  That, in fact, was not the case last week.  Perhaps it was the need to tie up some loose ends before heading off on vacation, but deals were done, new funds were launched and loans and grants were made.

The Abraaj Group and its deals made a number of headlines last week.  In its first deal in Algeria, it took an undisclosed stake in transport and logistics business, La Fleche Bleue Algerienne.  In doing so, they aim to benefit from the high growth rates being posted across several sectors in Algeria which are served by the company.  In other news, the $140 million takeover battle between Abraaj subsidiary, Abraaj Investment Group, and US Cereal maker Kellogg’s to acquire Bisco Misr rumbled on.  For the third time in a month, Kellogg’s upped its bid for the Egyptian snack maker, trumping Abraaj’s revised offer which it made earlier last week.  The ball is now back in Abraaj’s court once again.

Staying in Egypt, there were a couple of exit announcements as well last week.  Once again, The Abraaj Group partially exited its stake in Integrated Diagnostics Holdings in a sale to private equity firm, Actis.  The deal gives Actis a 21% stake in the Egyptian healthcare firm.  Meanwhile Qalaa Holdings, the former Citadel Capital, continued its strategy of divesting itself of non-core assets with the announcement that it was selling Alexandria Automotive Castings and Amreya Metal Company for some $36 million to a consortium of investors led by a founder of both firms, Ahmed Sid Ahmed.  The deal is expected to close in January 2015.

On the fund raising front, there were a number of interesting bits of news last week.  GEMfonds is teaming up with The Infrastructure Bank and Sigrun Partners to raise a $500 million infrastructure fund targeting deals in Nigeria.  The fund will make loans and investments in both greenfield and brownfield infrastructure opportunities.  London-based Duet Group, the global alternative asset management firm, announced plans to raise a $300 million sub-Saharan private equity fund.  The fund, the firm’s first dedicated Africa fund, will target consumer goods, healthcare and financial services companies in a number of countries.  It’s expected the first close will take place in at the end of the first quarter next year, with the final close taking place by the end of next year.  Additionally, investment banking group Eczellon Capital announced plans to launch a $250 million West Africa-focused private equity fund.  The fund, which has already garnered significant investor commitments, will target opportunities in energy, power, infrastructure and other active sectors in West Africa.  It’s anticipated to close between the second and third quarters of 2015.

Once again last week, the DFI sector was especially active providing $1 billion in commitments to African projects.  The African Development Bank has approved a $500 million debt/equity package to support the launch of the Development Bank of Nigeria.  The Bank’s brief will be to focus on providing micro, small and medium-sized businesses with financing.  Africa Finance Corporation announced the close of a $300 million dual tranche club facility last week, having received $636 million in commitments from 22 lenders.  And the World Bank has approved a $200 million loan for the construction of a multipurpose dam in Kenya’s coastal region.  Aside from improving water supplies to this populous and drought-prone region, it’s planned to deliver 34 megawatts of power and irrigate significant areas of land in the area.

And finally, South Africa’s Business Day reports that Namibia plans to start tapping markets and investors as early as next year to finance its $19 billion, five year development plan and upgrades its ports, roads, railways and airports in a bid to become a major regional transport hub.  It’s an ambitious number, and it will be interesting to see whether investors’ appetite for these African infrastructure opportunities will remain healthy.

You can view these and other stories bu clicking through to December 22nd’s full issue of Africa Capital Digest.

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