Weekly Wrap, February 2nd, 2015; Old Mutual, Phatisa, STANLIB and more make private capital news last week

The Week in brief…February 2nd, 2015

From their $374 million war chest for acquisitions in Africa, Old Mutual whipped out their check book again last week, this time to bump up their stake in Nairobi-headquartered insurer UAP Holdings.  In a $155.5 million deal, they reached an agreement to acquire stakes owned by AfricInvest, The Abraaj Group and Swedfund giving them another 37.3% of the company and allowing them to take a controlling stake of 60.7%.  Taken together with their transaction in the company earlier in January, last week’s deal takes Old Mutual’s investment in UAP to $253 million.

Meanwhile Phatisa announced its eighth transaction from the $246 million African Agricultural Fund with an investment in Kenyan packaging manufacturer General Plastics.  Terms of the deal were unreported. According to a press release, the investment in a non-agricultural asset was motivated by the opportunity to take a stake in a firm that produces high-quality products that help to minimize food spoilage and waste.  And in another deal with undisclosed terms, the private equity division of Centaur Holdings is providing IPC Coal with a secured financing package to help accelerate the extraction of thermal coal reserves at its Nungu Colliery in South Africa.

The most notable fundraising news of last week came from STANLIB with the announced closing of their maiden private equity infrastructure fund at R1.2 billion or approximately $103 million.  The majority of the fund was raised from South African institutional investors since its first close in March 2013. The fund has already invested more than 50% of the fund’s commitments in new-build opportunities, mainly in renewable energy projects.

Ascent Capital is planning to raise another $10 million for the Africa Rift Valley Fund by June 2015, capping the total at $60 million.  The fund targets businesses that are well-positioned to benefit form the rise of the consumer in Africa.  Guy Brennan, a Partner with the fund, tells Reuters that it looks likely that the fund will complete its first investment in an Ethiopian healthcare company wthin the next few weeks.  The fund’s preferred deal size is between $2 million to $10 million.

Demand for Africa’s government debt issuance shows no sign slacking.  Tunisia’s $1 billion bond generated orders of $4 billion, allowing the country to borrow at a lower than expected interest rate of 5.875% over 10 years.  This, in the same week that The Overseas Development Institute is warning of a potential Asian-style debt crisis in Africa as the strengthening dollar adds an expected $10.8 billion in currency costs.  A number of other government debt deals are in the pipeline, so we will watch to see to what extent demand wanes in the coming months.

Finally, on the The Brookings Institution‘s blog, a call for the rising levels of infrastructure investments to be better coordinated, and are strategically and effectively applied across the region.  As part of their Foresight Africa 2015 project they identify six priorities for the region as they move to close the infrastructure gap.

You can review these and other stories by clicking through to this week’s issue of Africa Capital Digest.

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