Deals from FinancePlus Africa

Deals from FinancePlus Africa


Development of a Stone Crushing Plant in Addis Ababa

The Project is the development of a stone crushing plant of 200t/hr capacity in Addis Ababa. The demand for gravel in Addis Ababa is very high owing to the construction boom of the city. The supply lags far behind the demand. The Developer has a quarry site with 3 million cubic meter deposit and 30 million cubic meter expansion area. The license and all legal documents have been updated and ready. Once an agreement is made production can start within four months.

The Project requires 1.2 million USD. The potential profit/sales ratio of the project is 49.7%; with IRR of 67% at 10% discount rate, providing 4.3 million USD per annum in two shift operation. The investment payback period is 8 months. The Developer proposes and equity stake of 50% to an investor.

Deal Contact:
[email protected]

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Seven Branded Hotels development in Africa

The Company, in collaboration with a UK based developer, is leveraging the gap of quality branded hotels in Africa through a JV initiatives to develop seven mid-size branded hotels for an investment of $350 million USD.

The Company is an African Hospitality investment and Financing Firm that invest and leverages hospitality gap in Africa. The Company facilitates title to the site (usually freehold), hire architect for concept design, assist with costing for the project from quantity surveyor, conduct investment appraisal & feasibility, and facilitate the Tendering of the construction contract and project management. The Company is headquarters in Nigeria, and has offices in Dubai, and the USA.

The UK based developer and EPC contractor is a professional partner combining unique experience in delivering hotel development in Sub-Saharan region, using a four phase structured development process proven modular build system to achieve brand standard, and single point of responsibility for development delivery. Moreover, efficiency of delivery, provides enhanced returns, and control of costs and risks. Through their ability to deliver projects the firm has established working relationships with brands such as Park Inn, Novotel, Ibis, Holiday Inn, Marriott Courtyard and Hilton Garden Inn.

The estimated cash-on-cash return is approximately 30%, and IRR is approximately 25% by the end of the first three years of operations, and the NOI ratio is estimated at 15%.

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Sub Saharan Africa Travel Services Merger Seeks Private Equity

Existing travel services businesses in Sub Saharan Africa(SSA) plan to merge their travel management companies to form a leading travel group (the “Group” or “TCI”) for the region. TCI will be a growing force in the travel industry in Africa, operating competitively throughout SSA.

TCI is a Mauritius-based travel services group, invested in a portfolio of mostly franchised, category specialist and formula driven, high touch and high tech travel service outlets, tour operations, global travel retail brands and support services operating throughout SSA.

TCI manages a number of leading global travel Brands – Uniglobe Travel, First Car Rental (East Africa), GSA agents in East Africa for Air Mauritius, Air Sudan, Air Zimbabwe, Yemeni Airways, Pakistan Int. Airways, Turkish Airlines

TCI’s growth will be primarily driven by a combination of key company owned outlets and franchisee owned outlets, (thereby also reducing the capital requirements of the group), allowing TCI Management to focus on building brand equity through aggressive marketing, and unlocking value within its own travel operations and the franchise system through vertical integration and shared services initiatives and group volume opportunities.

The group currently manages $80 million in third party sales through 20 outlets, with $40 million being managed through 5 outlets under the direct control of management. Segmental sales are roughly as follows:
Total Group Under Direct Control
• Corporate travel – $60million $30 million
• Leisure travel/tours – $17million $7million
• Car rental – $1million $1million
• Airline GSA – $2million $2million

The economies of SSA are expected to continue growing at double digit figures until 2020, on the back of a commodities and infrastructure development boom and a huge migration of people (4.5% pa) from rural to urban areas.Travel is expected to continue to grow at a multiplier of this economic growth in SSA.

SSA’s strategic holdings of key mineral , metals and oil are huge and it is one of the top producers of almost every category. Africa has a population almost equal to India and a higher number of middle class than India and is undergoing faster urbanisation than India. Travel and Tourism is a leading beneficiary of this growth and development and still in an early phase of its deregulation and developent as a key sector of the African economy, compared to mature declining industry in the Western world.

Travel and tourism accounts for approximately 10% of the GDP of most SSA countries and corporate travel is estimated to be worth over $10billion in total. Spending on business travel in SSA has been growing at double digit annual rates for the last two decades, and growth seems set to continue and accelerate in line with growing economic activity.

TCI is expected to grow organically and through acquisitions in SSA, while also improving performance through the adoption of advanced systems and shared services needed to provide unique valued added services to its diverse regional client base of midsized, relatively big spenders on business travel and discerning leisure travelers.

TCI will be one of the top Regionally based sophisticated travel management service companies geared to manage its clients business and leisure trips more efficiently, effectively and economically, providing unbeatable travel experiences, logistical and marketing support to industry airlines and other suppliers. TCI will be able to achieve substantial cost savings and greater effectiveness through centralisation of marketing, administration, accounting and some operational activities.

TCI’s Regional target market is one in which the promoters have been operating successfully for a considerable time (on average 10 years each and a combined 105 years in total). In the last three years they have achieved annual increases in aggregate sales of around 25 per cent per annum.

TCI will be equipped with the resources – human, marketing and business systems needed to continue to expand their sales at the annual compound rate of at least 25 per cent per annum called for in the forecasts. This growth will be both organic growth and acquisitions of other Uniglobe franchises or targetted travel management companies in the Region, as well as expansion of its niche tour operations, airline logistics and marketing support and car rental business.

Considerable improvements in sales and profitability are expected due to a combination of:
• Improved marketing and sales through centralised focus and sharing,
• Productivity improvement from improved business processes, shared services and automation
• Margins improvements from changes in product mix, bulk buyig discounts for early settlement and value based selling ,
• Cost reductions from shared services solutions and synergistic activities.
• Improved liquidity due to injection of private equity, enabling faster growth and related profitability over the next 4 years.

Gross Third Party Sales of TCI are currently at an annual rate of $80 million (i.e. approximately 1,2% of total estimated regional spend on travel of $10billion). This currenty yields an operating profit of $1million (on Revenue of $5million after operating expenses of $4 million. i.e 20% of Revenue)

TCI’s initial capitalisation is estimated at $5 million ( i.e. 5 * PBT ).
A private equity partner is being sought to provide $5 million for a 40% equity stake in order to have adequate cash to fund organic and acquisitive growth over the next 5 years. This will take the liquidity ratio from 0.4:1 to 1:1 and enable us to build a solid liquidity ratio of 2,5:1 over the next five years as profitability and growth improve.

The forecast – and the target – for 2020 is for total group sales to be $300million (i.e. only 3% of total expected travel spend of $20billion in SSA.)
Of this TCI will control directly $200 million and franchised offices $100million.

On an EV for TCI in 2020 of $60 million (PBT of $12.5 million x 5); a 40 per cent share for the private equity partner is $24million ( 5.8*cash); Dividends in Years 2 to 5 at the rate of 40 per cent of PAT generates equates to $10million cash; private equity partner’s 40% share equal to R4 million – (giving the private equity partner a total return of 6.8*cash)

On these assumptions and forecasts, annual IRR over five years on the private equity partner’s $5 million investment would be +/-35 per cent pa.
For more information contact:
Uniglobe Travel
Mike Gray
[email protected]

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Nigerian Video-on-Demand Service

Vision Media London Limited is seeking £228,645 seed finance against 30% equity to launch as a video-on-demand brand and produce a range of programs aimed to satisfy the tastes of 18-30 year-old demographic model and Nigerian diaspora of 3,000,000 in UK and 3,250,000 in US, of largely college, or university students, or young professionals, plus 48,366,179 Nigerian Internet users.

The website will be hosted from UK and linked to payment gateway to process major credit cards, PayPal, plus local Nigerian SMS money transfer, and credit cards. Next Generation Networks (NGN) for smartphones will drive convergence of data and video/TV, enabling the provision of triple-play services that will partly monetize the operation.

The hallmark to our website VOD and Mobile TV success will be providing free 10-minute example video clips of a weekly celebratory reality series called “Star Rider”, plus a weekly hip magazine review show called “Backstage” as well as a monthly live music concert series called “Afro Sunsplash”. This will whet the audience appetites and entice them to signup to our monthly payment plan of £1.21 ($2.0) for either “Star Rider”, and/or “Backstage”, or £2.43 ($4.00) for “Afro Sunsplash”, using credit cards, PayPal, or SMS money transfer. Customers will be able to download and actually purchase a digital movie file, rather than rent for limited period.

Best-case scenario is based on different revenue streams from VOD and banner advertising beginning with 0.04% market penetration and 0.01% monthly growth rate, which will enable repayment the start of the 2nd year. Worst-case scenario is based on approximately half of the estimated yearly growth rate.

Contact for more information:
Vision Media London Limited
Martin Baker
+44 208 878 5203
[email protected]

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Russia’s Norilsk Sells Stakes in African Nickel Mines for $337 Million

Moscow Times
Gaborone — Russia’s Norilsk Nickel, the world’s top nickel and palladium producer, said it had agreed to sell stakes in two African nickel mines for $337 million to BCL, a Botswana-based copper mining firm looking to expand.

Norilsk will transfer to BCL its 50 percent interest in the Nkomati nickel and chrome mine, in South Africa, and its 85 percent stake in the Tati Nickel Mining Company, in Botswana, the two companies said Monday.

BCL will also assume all attributable outstanding debt and environmental and rehabilitation liabilities associated with the assets.

Norilsk embarked on a new strategy last year that includes pulling out of international assets that it has identified as non Tier-1 mining operations. Tier-1 is an industry designation for what are typically the biggest and lowest-cost mines.

“The sale of the African operations marks a major milestone in our commitment to deliver the new corporate strategy. The transaction is part of the management’s roadmap to release capital from non-core assets and will have a positive impact on the company’s return on invested capital,” Pavel Fedorov, Norilsk Nickel first deputy CEO, said in a statement.
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Fast-growing Regulated Nigerian Bank

This Bank was relicensed in December 2012, and opened March 4, 2013 as a specialized regional bank recalibrated for technology-driven efficiencies, service relationships and results. The Bank is a clean, liquid, well capitalized bank fully endorsed by the Central Bank of Nigeria.

The team, in its initial ten months of operation, has achieved the following:
– Positive operating income before depreciation
– Strong organic growth since launch: Deposits up 300%, Total Assets up 308%, Loan advances from N0 to N25.4billion.

The Bank is poised to execute an IPO as soon as possible and not later than 3 years.

Bank Overview:
– Licensed by CBN on the 27th of December 2012
– Financials: Total Assets of 98bn. Total Deposits of 72.6bn. Total Liabilities of 78.5bn. Shareholder funds of 19.4bn. Gross Earnings of 5.6bn. Profit before Tax of (2.5bn).
– Number of accounts grew by 2215% from 480 accounts at inception to 11,114 to date.
– 500+ employees.
– The BANK has presence in 9 locations across 2 southern zones with plans to deploy another 21 before the end of 2014. In addition to these locations it intends to increase its market reach through the set up of Agent locations in other zones inside Nigeria.
– Eight Experience Centers to date with 13 at various stages of construction; 50 ATMs; 144 POS’s.
– Advisors: Horwath Dafinone, Deloitte, KPMG, MPP Africa, Securities & Capital Management Company, and White & Case.

Proposed Transaction:
– Currently, the BANK is seeking to raise equity capital of N10billion (~$60mn) to accelerate asset growth.
– In parallel with this capital raise, the BANK proposes to raise additional US$100million as Convertible Notes in the International Capital Market to accelerate growth, competitiveness and value creation for its investors.
– This local capital raise is a combination of Rights Issue and Offer for Subscription via Private Placement.
– Rights Issue of 1,389,473,684 ordinary Shares of N1 each at N1.90 per share
– Offer for Subscription of 3,200,000,000 ordinary shares of N1 each at N2.30 per share
– The proceeds from these capital raise activities will be utilized for the following:
 To accelerate asset growth
 To increase working capital for day to day operations of the bank
 To make selective investments

Contact Information:
Phoenicia Capital Advisory
Paul Kazarian, CFA
T: +961 71 509 506
E: [email protected]
Skype ID: paulkazarian

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Luxury resort and villas with golf courses in South Africa and Zambia

The Project consists of three estates located on game farms of 10,000 hectares, 20,000 hectares and 8,000 hectares respectively situated in Baviaanskloof, Eastern Cape, South Africa, Nvimbi on the borders of Malawi and Mozambique, and Lake Kariba in Zambia.

The three game farms will have 200 luxury fully furnished villas available, ranging from four to fifteen bedrooms with a selling price of USD 3 million to USD 18 million per unit, giving buyers the opportunity to own a piece of real estate within a these private wildlife estates, managed by professionals.

The Project includes the development of sixty two-bedroom beach front apartments in Jeffreys Bay, Eastern Cape, South Africa, with conference facilities available for functions and venues. Each will carry a selling price of USD 670,000. The Project will also develop four luxury hotels at each site consisting of two 120 room hotels, and eighty room hotel and a 300 room hotels. Luxury villas will be available for hunters and those preferring their privacy with isolation. Mountain hiking trails will be earmarked for hiking and fishing spots for residents and tourists.The game farm in Zambia also has two kilometer landing strip.

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LUKoil Buys Into Cameroonian Offshore Project

Moscow Times June 24, 2014
Russia’s No. 2 oil producer LUKoil has bought a 37.5 percent share in the Etinde project off the coast of Cameroon from Edinburgh-based oil and gas explorer Bowleven, both companies said Tuesday in online statements. At the same time, New Age African Global Energy has bought a 12.5 percent stake from Bowleven, raising the group’s share to 37.5 percent.

The deals will see Bowleven’s share drop from 75 percent to 25 percent while earning $250 million from the sale. LUKoil and New Age will pay Bowleven a combined $170 million on completion of the deal, $40 million at the project’s final investment decision, which is expected in 2015, and will cover $40 million in costs for two appraisal wells, according to Bowleven.
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African Tantalum Mine and Plant for Sale

This opportunity involves the acquisition of a Tantalum mine and an operational Plant/Company during a privatization.

Company Overview:
Company was established in year 2000 in accordance with the Commercial Code of the local African government. The Company has a capacity of 215 tons per annum and 475 permanent employees. With current prices, annual revenues could reach around $40mn (without any expansionary efforts). The Company was very recently replenished and restarted operations.
Mine reserves are estimated at 17,000 tons of Tantalum Pentoxide. Acquiring this mine will allow the operator to control 9% of the global Tantalum production.

Company Mission:
• Engagement in prospecting, exploration and evaluation of mineral deposits excluding petroleum, natural gas and geothermal energy
• Development of economical mineral deposits
• Constancy services in the field of mineral exploration and evaluation
• Offering exploratory services such as; core drilling, and ground and bore-hole geophysics, surveying, chemical analysis, and geological investigations
• Participating in joint venture in the development, production and sales of mineral commodities

Product Description:
• Tantalite Concentrates to be used as raw material for the production of the Ta and Nb value and products
• Tantalum Pentroxide (Ta2O5) with a purity level 99.99% which is a marketable grade
• Niobium Pentoxide (NB2O5) with purity level of 99.00% which is a marketable grade
• Tantalum K-Salt (K2TaF7) powder with purity level of 99.80%

Target Markets:
• The products are destined for foreign markets demanding: Tantalite Concentrate, Tantalum Pentoxide and Niobium Pentoxide powders.
• The Company restarted production of cleaned Tantalite Concentrate using Sulfuric Acid leaching process in order to remove radioactive substances (Uranium and Thorium).
• Market share, which primarily includes Tantalum and Niobium Pentoxide powder, is increasing significantly in recent years. The demand increased from 14% in 2005 to 36% in 2011.

Year 2009: 144.7 tons
Year 2010: 298.6 tons
Year 2011: 187.1 tons
Year 2012: 116.3 tons

Financial History:
Year 2009: Revenues $4mn and EBITDA $1mn
Year 2010: Revenues $7.8mn and EBITDA $2.7mn
Year 2011: Revenues $15.7mn and EBITDA $10.3mn
Year 2012: Revenues $5mn (due to Plant being put on hold for refurbishment).

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KKR Buys Rose Farm in First Africa Deal

Wall Street Journal June 4, 2014
LONDON — The Deal is the Private Equity Firm’s First Foray in Africa
For private-equity giant KKR & Co., a debut investment in Africa smells of sweetheart roses. Afriflora is an Ethiopian company that grows about 730 million of the flowers a year for export to Europe, making it a significant player in the east African country’s blossoming cut flower export industry. KKR is investing about $200 million from its $6.2 billion European fund to buy a stake in the company, according to a person…
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