This Week in Africa Finance
Plus, Somalia secures $1.2 billion debt cancellation, Dodai raises $4 million in Series A and Bamburi Cement sells Ugandan subsidiary for $84 million.
Happy Monday! Welcome to another week of the most significant deals, developments, and trends shaping Africa's fast-changing financial landscape. If you're joining our community for the first time, why not subscribe here
In today’s email:
- Sovereign Debt: Ghana's $13 billion bond restructuring talks begin.
- Corporate Debt: Pick n Pay strikes corporate debt deal ahead of its Boxer brand's IPO.
- In the chart: African countries with the lowest inflation rate are listed.
- Market Snippets: Egypt's Islamic banking grows to $662 million.
- Marco Matters: Paris Club cancels Somalia's $1.2 billion debt.
- Deals Roundup: Notable deals of the week
Sovereign Debt
Ghana's $13 billion bond restructuring talks begin with creditors.
The world's second-largest cocoa producer, Ghana, has started talks with overseas creditors, including BlackRock, Greylock, Amundi, and Abrdn, on its $13 billion debt. The country and its international creditors have signed a non-disclosure agreement (NDA) that will prevent the country's largest bondholders from trading the bonds in the short term for at least two weeks for non-public information.
Corporate Debt
Pick n Pay strikes corporate debt deal ahead of its Boxer brand's IPO.
South Africa's leading grocer, Pick n Pay, is in renegotiation talks with FirstRand over its loan commitment as it prepares for the IPO of its Boxer Brand. The South African retailer has been facing financial challenges, which have affected its customer engagement and supply chain. It needs an urgent business turnaround, which has seen the return of Sean Summers as CEO last year.
In the Chart
Most African countries, mainly West Africa, are experiencing double-digit inflation rates, which puts pressure on their monetary policy. However, some African countries have their inflation rate under control at under 7 per cent as they grow their economies while making themselves attractive to investors.
Markets Snippets
- Africa’s second-largest telecom operator, Airtel Africa, is considering an IPO for its mobile money unit, which could be valued at over $4 billion.
- Egypt-based Beltone Holding has achieved a remarkable turnaround after reporting a profit of EGP 369 million (approximately USD 7.7 million) in 2023, compared to a loss of EGP 269 million (approximately USD 5.6 million) in the previous year.
- Egypt's Islamic Banking grew by 22.3 per cent to nearly EGP 606 billion (approx. USD 662 million) by December 2023, marking an increase of EGP 110 billion (approx. USD 120 million).
Macro Matters
- Ghana's inflation rate fell to 23.2 per cent as the country's economic reform continues to take effect.
- Ethiopia's inflation rate fell to 28.4 per cent compared to 29.40 per cent in the previous month.
- Somalia has received a $1.2 billion debt cancellation from the Paris Club, as reported by Reuters. Under the International Monetary Fund and World Bank Enhanced Heavily Indebted Poor Countries Initiative, additional relief of $185 million will be provided on a voluntary and bilateral basis.
- Nigeria's inflation rate rose to 31.7 per cent in February 2024 from 29.9 per cent in January 2024.
Deal Flow
M & A
- South Africa's RMB Ventures and Bopa Moruo Private Equity, with management, have acquired a majority equity stake in South Africa's leading cancer treatment provider Icon Oncology.
- Adenia Partners has agreed with the leading pan-African supplier of industrial and medical gases, Air Liquide, to acquire its 12 subsidiaries in West and Central Africa and the Indian Ocean. The firm intends to provide additional funding of up to €30 million to grow the business post-acquisition.
- Kenya-based Bamburi Cement has sold its equity holdings in its Ugandan subsidiary to Hima Cement for a reported $84 million.
Fundraising
- South Africa-based ALT Capital Partners' Reimagine Social Impact Fund I has received a master facility agreement from Investec. The fund will actively invest in convenience retail across South Africa.
- Frontier-focused Investor XSML Capital has launched its fourth fund, African Rivers Fund IV, with a first close of USD 98.7 million, as it looks to expand in Zambia.
Logistics
- Ethiopian EV startup Dodai raised $4 million in Series A funding from Musashi Seimitsu, Nissay Capital, and Inclusion Japan.
Infrastructure
- South Africa and Namibia are in discussion talks to launch $377 million infrastructure rail and port projects over the next three years.
Venture Capital
- Paris-based Ring Capital has launched Ring Africa, its impact investment vehicle, with a target of EUR50 million (US$55 million). The fund targets young start-ups with a solid social and environmental impact in French-speaking West Africa.
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