Atta Africa Financial Update

Key commercial and political activity in Africa for private equity investors by DCE Partners, UK Private Equity advisors to Atta.

Executive summary: The African Development Bank (AfDB) has renewed its support to its largest shareholder, Nigeria, which is in need of counter-cyclical stimuli. The Bank’s President, Dr Akinwuni Adesina, announced that the country would receive an additional US$4.1 billion between 2016 and 2017, raising existing commitments to US$10 billion. The funds will be used for infrastructure development, power, agriculture and the private sector to be directed towards SME lending.

In addition, the Federal Government is requesting a US$1 billion loan to help fund the 2016 budget, which will be concessional and carry an interest rate of 1.2%; a further US$1 billion Eurobond is touted for December. A recent report from Nigeria’s Debt Management Office shows that the country’s latest debt-to-GDP ratio only amounts to 16.8% in dollar terms, which compares favourably with most of its peers. Diversification of the economy away from unrefined oil exports remains the best long-term solution to Nigeria’s current monetary woes. 

Fact: In a ranking of the most popular mobile phones of all time in terms of total sales, it is a Nokia holds 1st position. And 2nd, 3rd, 4th, 5th and 6th. The first iPhone ranking is 12th.

Approval for construction of gas pipeline in Ghana

  • The Ghana Gas Company Limited has been given the green light to build a separate pipeline from the Atuabo Gas Plant in the western region to Tema in Greater Accra region
  • The new line is estimated to cost between US$250 million and US$500 million

Bain in US$1.5b South African Edcon debt for equity deal

  • Taken private in a highly leveraged 25 billion rand (US$3.5 billion at the time) buyout by Bain 2007, Edcon has struggled to grow at a fast enough rate to pay down debt
  • Under the deal, Franklin Templeton, one of the world’s biggest fund managers, will become a top shareholder in Edcon, which sells brands such as Tom Taylor, Top Man and Salsa
  • The retailer has been grappling with an over-leveraged capital structure for several years, after troubles in its credit business in 2014 coincided with an economic slowdown and weak consumer spending in South Africa

Carlyle to buy a majority stake in SA clothing maker Amrod

  • Private equity company Carlyle Group says it will buy a majority stake in South African promotional products and clothing maker Amrod and plans to expand the business in other markets
  • Carlyle said it expected the transaction to close in 2016, subject to regulatory approvals, and gave no further financial details