Rohatyn Group completes Ethos Private Equity acquisition.
Plus French-African Fund 2 (FFA 2) completes final close, Public and Publicly Guaranteed External Debt breakdown in Sub-Saharan African
It was another interesting week in the world of business, economics, and finance in Africa, these are the key highlights. If you are reading this newsletter for the first time please subscribe to get these weekly updates and more. If you have already subscribed why not forward it to a friend or colleague?
In today’s email:
Asset Management: Rohatyn Group expands into Africa.
Banking: Access Holdings’ $300 million investment in its banking subsidiary.
Chart: Sub-Saharan Africa’s Public and Publicly Guaranteed External Debt Breakdown
Deal Roundup: Notable deals for the week
Global asset management firm Rohatyn Group completes acquisition of Ethos Private Equity.
The Rohatyn Group (TRG), a specialised global asset management firm, has completed the acquisition of Ethos Private Equity, the well-known alternative asset manager that focuses on Africa. As emerging market specialists TRG pursue investment opportunities in economies by focusing on areas of structural inefficiency and special opportunity hence why the Ethos PE acquisition is quite unique.
The combined firm will result in almost $8 billion in AUM and almost 400 institutional LPs.
It increases Rohatyn Group's footprint across Africa at such an exciting time of significant opportunities in private markets, real assets, and public markets.
This deal is a perfect match of local insight and knowledge with global investing skills to the benefit of the continent.
Access Holdings’ $300 million investment in its banking subsidiary.
Access Holdings Plc, has completed a $300 million capital investment into its flagship subsidiary, Access Bank Plc. The investment takes the form of a Tier 1 capital qualifying Mandatory Convertible Instrument and is expected to improve the Bank’s shareholders’ funds and total capital ratios.
This holding structure affords Nigerian banks the to explore new opportunities and diversify their revenue base.
Other leading banks like IBTC Bank, FirstBank, UBA Group and GTBank have restructured into holding companies subject to the required regulatory approvals.
Fintech companies and challengers banks are using innovative solutions to target customer segments neglected by traditional banks which is putting pressure on their balance sheets and market share.
Public and Publicly Guaranteed External Debt increases in Sub-Saharan African
The World Bank in its sub-Saharan Africa’s economic outlook for 2023 has expressed concerns about the ability of some African countries to refinance their multi-billion Eurobonds.
Some of the key insights are :
Sub-Saharan Africa's nominal public debt has tripled from US$354 billion in 2010 to about US$1.14 trillion in 2022.
This has resulted in an increase in the continent’s median public debt-to-GDP ratio from 32 % in 2010 to 57% in 2022.
Debt increases across the continent have come with a changing landscape of external creditors.
Sub-Saharan African countries have also increased their reliance on Eurobonds and Chinese loans between 2010 and 2021, with over 15 countries issuing bonds in the international markets since 2010.
The share of Sub-Saharan African countries’ public and publicly guaranteed (PPG) external debt increased from 18% in 2010 to 27 % in 2021.
However, the share of official bilateral debt, excluding China, declined from 12% to 5 % during the same period.
Kenya’s $2 billion debut Eurobond maturity is due in June 2024 and Angola’s $1.7 billion redemption is due in 2025.
M & A :
Egyptian FMCG market leader Easy Care for Cosmetics and New Easy for Cosmetics has been acquired by Fine Hygienic Holding, the manufacturer of hygienic paper products and long-term germ protection solutions.
Turkish Commercial Bank Al Baraka Bank is to acquire a 10% equity stake in Egyptian-based digital payment provider Taly.
Ghanaian fintech startup BezoMoney has acquired Tigerforce Microfinance Limited, a local Ghanaian microfinance company.
Private Equity :
Sub-Saharan Africa's fastest-growing fish farm, Kenya-based Victory Farms has successfully completed a $35 million Series B round, to expand its operations in Kenya and Rwanda. The investment was led by Creadev, a global VC and growth equity evergreen investor controlled by the Mulliez Family. Other investors include the Acumen Resilient Agriculture Fund (ARAF), DOB Equity, Endeavor Catalyst Fund, and Hesabu Capital.
The private-equity consortium Development Partners International (DPI) and Amethis have acquired a significant minority stake in Egyptian Marcyrl Pharmaceutical Industries.
AfricInvest has announced a final close of its French African Fund II (“FFA II”), having raised over €50 million of subscriptions from French and international institutional investors, private investors and family offices.
The U.S International Development Finance Corporation (DFC) has invested $25 million in Novastar Ventures’ new investment vehicle Africa People + Planet Fund aimed at investing in agriculture and climate solutions start-ups.
Equator an Africa-focused climate tech venture capital firm has completed an initial close of its first fund with $40 million in commitments. Its limited partners include BII, the Global Energy Alliance for People and Planet (GEAPP), impact investor DOEN Participaties and the Shell Foundation.
Infrastructure Finance :
The African Development Bank Board (AfDB) has approved $49.92 million to Eritrea to build a 30 MW Solar Photovoltaic Power Plant in Dekemhare.
Zambia’s state-owned power utility company Zesco has signed a Power Purchase Agreement (PPA) with a subsidiary of China Huadian Corporation, Integrated Clean Energy Power Company Ltd (CiEG), to produce 2,400 Megawatts of renewable energy estimated at US$3.5 billion. The agreement will be rolled out in phases of 600-800MW over a 3-year period in 4 provinces beginning this year with 300mw in Southern Province and 300mw in Central Province.
The European Union (EU), France Development Agency and the Ethiopian government signed a 32 million Euro Financial support agreement.
Private Credit :
South Africa-based Paymenow has raised a $24 million debt facility through Rand Merchant Bank to accelerate its market-leading Earned Wage Access (EWA) platform, Growth Paymenow.
The International Monetary Fund (IMF) has approved a two-year arrangement for Morocco to benefit from a $5 billion (MAD 51 billion) Flexible Credit Line to provide support from potential economic shocks and challenges.
Venture Capital :
Nigeria-based shared mobility startup Shuttlers has raised $4 million in a new funding round to facilitate expansion.
South Africa’s second-largest online payment gateway Peach Payments has secured $31 million in funding led by Apis Growth Fund II.
People Moves :
Investment Funds for Health in Africa (IFHA), have appointed Menka Shah and Eline Blaauboer as partners, joining OnnoSchellekens in building Africa’s first healthcare-focused private equity and impact fund
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