Standard Chartered Private Equity Invests $47.5m in Seven Energy

Standard Chartered Private Equity Limited has announced that it has invested $47.5m to acquire a minority stake in Seven Energy, a leading Nigerian gas exploration and development company. Seven Energy was formed in 2007 and is focused on the provision of gas to leading industrial firms in Nigeria.

Standard Chartered’s investment will aid in the development of Seven Energy’s business and toughen its competitive positioning. The use of funds will provide a much needed spur for the company to provide to Nigeria’s growing energy needs.

Ghana: Exploit Opportunities in Growing Tourism Sector

TradeInvest Africa (Cape Town)

Ghana's tourism sector is expected to grow at an average rate of 4.1% over the next two decades, indicating a need to build more tourist accommodation. There is an opportunity to participate in the development of a beach complex in Kokrobite, a popular tourist destination about 30kms west of the Ghanaian capital city of Accra.

The fishing village of Kokrobite is a popular destination for tourists seeking a quiet, tropical paradise with beautiful sandy beaches. There exists a burgeoning demand for day, weekend and longer-term accommodation and European standard restaurant and entertainment facilities, particularly near the beachfront.

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Emerging Capital Partners Invests In ananchi Group Holdings, a telecommunications company

The Africa-focused private equity firm, Emerging Capital Partners has committed $25 million to Wananchi Group Holdings, a telecom company specializing in pay-television and Internet services in Kenya and Tanzania

The equity investment will be used to upgrade and expand Wananchi's network infrastructure, enabling the company to provide east Africa's first triple-play service of digital pay-TV, high-speed Internet and voice-over-Internet protocol services.

ECP disclosed that East Africa has been characterized by limited supply of pay-TV and Internet services due to high costs and inadequate infrastructure.

Actis assembled new Africa team

UK emerging markets buyout firm Actis has beefed up its Africa operations with the recruitment of a West Africa head, a move that comes after its largest investor, the Government-owned CDC Group, was told to increase its investments on the continent.

Nigerian economy best for investment in Africa

ABUJA—In spite of the hype on the effect of the global economic meltdown on the nation’s economy, the Minister of Works, Housing and Urban Development, Dr. Hassan Muhammad Lawal has said the country’s economy was strong and offered the best investment opportunity in Africa.

Dr. Lawal who stated this while welcoming the proposal by the Turkish Construction Giant TASYAPI Construction Undertaking to participate in the construction industry in Nigeria, said the fact the country is enjoying stable polity glitters its fortune as investment hobnob in the continent.

Led by the General Manager and member of the Board of TASYAPI Construction Undertaking, Mr. Goksel Bodur, the Minister assured the Turkish Firm that Nigerian economy was strong and the polity stable and offered the best investment opportunity in Africa.

He recalled that Nigeria and Turkey have a very cordial bilateral relationship and told the Turkish delegation that they had nothing to fear.

He said the coming of the Turkish company into the Nigerian construction industry would strengthen the existing cordial bilateral ties between Nigeria and Turkey.

He urged the company to comply with legal stipulations for business operations in Nigeria, and explore their areas of interest with relevant officials in the Ministry.

The Minister also called on them to participate in joint venture schemes with the Ministry to provide beautiful and affordable housing schemes for Nigerians, noting that the sector was very viable and lucrative.

He said the Federal Government will welcome the injection of international capital and investment in the housing sector to ease the problem of affordable and decent housing in the country.

Addressing the Minister earlier, leader of the Turkish delegation Mr. Goksel Bodur said they were the third largest construction company in Turkey and were currently involved in construction projects in Europe, Asia and the Middle East.


Written by Chris Ochayi
Tuesday, 03 March 2009

Integrity Counts

Vimal Shah, CEO of east African FMCG giant Bidco, has built a household name by matching business sense and commitment with firm ethics. He explains his vision to Alison Lock, Africa Investors.

It isn’t an easy time to be doing business in Kenya at the moment, but Vimal Shah, founder and head of the Bidco empire, has weathered a few storms in his time. "It’s a phase we have to go through and it’s good to learn from," he says stoically of the current political upheaval.

"These are our peak months, but they’ve been the opposite," he says. "It’s disrupted the distribution systems and the way people work, and in Uganda we’re down by about 50% from normal levels."

It was a similar story 15 years ago, during the 1992 multiparty elections in Kenya, when his small consumer goods company, producing and selling edible oils, fats, soaps and margarines was in its crucial expansion stage.

"It was a very tough period for us when we started off. Interest rates went from 15% to 80% per annum. The exchange rate was also very high, worse than it is at the moment in Kenya, it was very hard to operate. Lots of companies didn’t make it."

Bidco did survive, however, and has since grown from an idea conceived out of his father’s textile business into a household name with production plants in Kenya, Uganda and Tanzania distributing 26 brands across 14 countries. Shah’s ambitions for his business now stretch continent-wide: "Africa’s per capita consumption is very low. It can only go up. We have a goal - 2030 - by which time we want to be all over Africa in this industry."

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What is Private Equity?

- Private equity can be divided generally into two streams, fund investing and company investing. Fund investing is essentially one level removed from company investing, as the fund will in turn invest in underlying portfolio companies. For this reason company investing is often called "direct" investing.

- Fund investments are in turn divided into primary and secondary. A primary investment is a commitment to invest in a new fund which is as yet unformed. A secondary investment is the purchase and transfer of an interest in an existing fund from another investor.

- Direct private equity investing, i.e., at the company rather than the fund level, can be described as typically being an investment of an equity nature in a company which is not listed on any public equity market. While there are a number of possible exceptions, this definition remains broadly true.

- All private equity investing, whether at the fund or company level, can be subdivided into buyout and venture. Buyout transactions typically include debt and involve established and usually profitable companies. Venture transactions typically do not include debt and involve young, even start-up companies and some element of technological innovation.

- Fundamental to a proper appreciation of how private equity funds work is an understanding of the difference between allocated, committed, drawndown and invested capital. Allocated capital represents that part of the overall asset mix which has been set aside for investment in private equity. Committed capital is that amount of allocated capital which has been committed. Drawndown capital is that part of committed capital which has been paid on demand. Invested capital is that part of drawndown capital which has actually been invested in portfolio companies (the other main use of drwandown capital being the payment of fees and expenses).

- The bulk of private equity funds are these days typically structured as institutional limited partnerships, though other legal forms exist, including some which are quoted and/or aimed at least in part at retail investors.

- A private equity fund may be thought of as a stream of cashflows (both into and out of the fund) which are essentially unpredictable both as to their timing and amount.

- Sole investment powers rest with the GP (manager) of the fund. Thus all private equity fund investors are wholly passive in the strict legal sense.

- Fundraising typically takes at 3-year intervals, although some funds, such as secondary funds, have in recent years been investing more rapidly, and thus fundraising at shorter intervals. This phenomenon also occurred with venture funds during the bubble period.

Playing an integral role in the revival of Africa.

LONRHO is a pan-African company with a diverse portfolio of investments focusing on Africa. Its investments range from primary infrastructure to transportation, support services, hotels and natural resources.

The Company is focused on servicing Western investment and African business by investing in emerging sectors across Africa, creating hubs of business through key investments.

Lonrho is re-establishing a significant presence on the African Continent through strategic investments across sectors in fast-growing African economies.