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Weekly Wrap, December 15th, 2014; Blackstar, PIC, RMB Westport make private capital news last week

The week in brief…December 15th, 2014

AIM-listed investment group, Blackstar made a splash at the beginning of last week with announcements of two deals.  Firstly, in a move that will lead to a name change and a shift to the big boards on both the Johannesburg and London stock exchanges when the deal closes, it is taking a 22.9% stake in Kagiso Tiso Holdings in a reverse cash and share deal worth R2.06 billion or $180 million.  Blackstar CEO Andrew Bonamour would be the CEO of the newly re-named Tiso Blackstar, with Tiso co-founders David Adomakoh and Nkululeko Sowazi assuming chairmanship roles in the new group.

Already a significant shareholder in South Africa’s Times Media Group, Blackstar also made an offer to acquire the remaining 67.5% of the media firm it does not already own for approximately $43 million.  CEO Bonamour fills the role of CEO of TMG also.  Blackstar states it is unlikely to invest any more in TMG itself, but would likely look to use the company’s future cashflows to fund investments in higher yielding opportunities for the new Tiso Blackstar.   TMG’s board is considering the deal.

In other deal news last week, real estate investment firm RMB Westport is teaming up with Trojan Estates for the $170 million development of the upmarket Royal Gardens Mall in Lagos.  Due to break ground in 2015, the 30,000 square meter retail and entertainment complex will be the largest in Africa once it is completed in 2017.  It’ll be situated next door to Royal Garden Estates, a high-end residential development and will appeal to luxury retailers looking to sell their products to Nigeria’s rapidly growing and aspirational middle class.  Across the continent, in another high-end property development deal news item, Vantage Capital is committing $10 million in mezzanine debt funding to Uganda-based Simba Properties Investment Company.  Part of the privately-held Simba Group, the developer’s portfolio holds a mix of hotel, office and residential properties.  The deal represents Vantage’s first deal in Uganda and its twelfth from its second fund, which is now 85% committed.  The fund expects to close its third mezzanine fund at $250 million in early 2015.

As the year draws to a close, the DFI sector was especially active last week, signing off on grant and loan approvals for a number of projects.  In a resurgent Cote d’Ivoire, the Port of Abidjan has agreed terms for an $875 million loan from China Eximbank.  As one of Africa’s busier ports, it needs to build a second container terminal and other assets.  Construction will begin in 2015 with an expected completion date in 2021.  Meanwhile, OPIC’s board of directors approved $233 million in financing to support the construction of Kenya’s 100MW Kipeto Wind Power Project.  General Electric looks set to begin construction on the wind farm in 2015, which will take approximately two years to complete.  And finally, the African Development Bank has granted Zimbabwe $108 million to improve water and electricity supplies in the country.  In hoc to the tune of $9 billion to foreign creditors, Zimbabwe still has difficulty raising fresh loans for the infrastructure projects it desperately needs.

Public Investment Corporation, the South African government-owned pension fund with $139 million in assets, made a number of headlines last week.   Firstly, Daniel Matjila, the fund’s chief investment officer, was named as the fund’s new CEO, with immediate effect, replacing Elias Masilela who resigned unexpectedly in May.  Secondly, one of its portfolio’s assets, unlisted cement maker Afrisam Group, sent a merger proposal to larger rival PPC, in a bid to become a significant force in Africa’s cement manufacturing landscape.  And thirdly, Reuters reports that PIC is teaming up with SasOil Holdings and Mozambique government-owned IGEPE to explore the feasibility of building $6 billion gas pipeline between the Mozambique and South Africa.

Continuing with the energy theme, we wrap up the week in brief with an interesting piece in The Guardian.  By some estimates, Africa needs $288 billion in energy investment if the goal of providing universal access to electricity by 2030 is to be achieved.  Progress to date has been slow, but a review of the steps taken by Rwanda in energy infrastructure investment and development as part of its Vision 2020 policy gives Africa’s governments a potential roadmap.  Here’s hoping they take it.

You can read these and more stories by clicking through to December 15th’s full issue of Africa Capital Digest.

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