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Weekly Wrap, February 9th, 2015; Actis, Heaven-Sent, Momentum and more make private capital news last week

The Week in brief…February 9th, 2015

In an article on BusinessDay’s BDLive website last week on how the mining sector’s ongoing struggles will lead to private equity firms playing a greater role than traditional financing, author Allan Seccombe quotes Rajat Kahli, Standard Bank’s Head of Global Mining and Metals, on his view that we’re likely to see an uptick in Chinese investments in African commodities this year as prices bottom out, sparking a flurry of M&A activity in the sector.  As if to underline that point, Chinese investment firm Heaven-Sent Capital made a cash offer of approximately $56 million to take one of the Johannesburg Stock Exchange’s oldest mining listings, Village Main Reef, private.  The cash bid represents a generous 46% premium over Village Main Reef’s 30-day average share price.  The deal is expect to close in May.

The Heaven-Sent deal was not the largest private equity transaction announced in Africa last week, however.  That honor goes to an exit instead.  Emerging markets private equity firm Actis has relinquished control of Globaleq Africa, earning $225 million in a sale to a partnership of two Development Finance Institutions, CDC and Norfund.  Norfund is taking a 30% stake in the solar company for a consideration of $225 million, while CDC is converting the stake it holds in Globaleq through Actis’s Infrastructure Fund 2 into a 70% direct interest in the company.  The DFI partnership plans to bring more projects to the construction phase in sub-Saharan Africa, building an additional 5,000MW of generating capacity.  The deal is expected to close in June.

A couple of other solar company financings also made news last week.  Kenyan “pay-as-you-go” energy company M-KOPA Solar has landed a fourth round of funding in a $12.45 million deal lead by LGT Venture Philanthropy.  The round attracted repeat investments from Lundin Foundation and Treehouse Investments, while Blue Haven Initiative participated for the first time.  Meanwhile, the IFC and Cordiant Capital announced loans totaling $7 million to Tanzanian solar firm Off.Grid:Electric.  The IFC is providing $4.5 million of the loan, with the balance being provided by Cordiant.  The funds will be used to expand the company’s services and help it achieve its plan to reach 200,000 Tanzanian households by the end of the year.

In fundraising news, Momentum GIM announced that it has successfully closed the first tranche of its Africa Real Estate Fund with $50 million of institution, family office and high net worth investor capital.  The fund has a fund raising target of $250 million for its final close in June this year.  The fund will work with Eris Property Group and make investments in retail, commercial and light industrial real estate developments, providing investors access to Africa’s strong economic growth and emerging consumer sector.

As with each week, we found a number of interesting and useful perspective pieces last week.  KPMG published a succinct summary of the key factors private equity investors should consider when planning and preparing for exits in Africa.  Juergen Braunstein of The London School of Economics penned a piece for the Financial Times on why Sovereign Wealth Funds shy away from investments in Africa and makes some suggestions about how their capital can be mobilized to help close the infrastructure gap in Africa.  And Teodoro Poulson of FACRA, Angola’s government-backed venture capital fund, looks at the changing venture capital model given the peculiarities of doing deals on the continent.

You can review these and other stories by clicking through to this week’s complete issue of Africa Capital Digest.

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