Quarter 4, 2017

The Loeriesfontein and Khobab wind farms announce the commencement of their 20-year commercial operations, a milestone they have achieved on schedule, on budget and without a single lost-time incident. With a generation capacity of 140 megawatts each, these two neighbouring wind farms combined make up the largest single expanse of wind turbines in South Africa. Situated in the Northern Cape, which has the highest volume of renewable energy utility power plants in the country, these sister wind farms comprise a total of 122 wind turbine generators, spanning 6 653 hectares.

Metier leads the sale of its investment in AE AMD (including two operational photovoltaic power plants totalling 30MW in the Northern Cape of South Africa) from its clean energy and resource efficiency fund, Lereko Metier Sustainable Capital (LMSC).

Metier and Spanish project developer AMDA Energia sold their interests in AE AMD to Old Mutual’s African Infrastructure Investment Managers (AIIM), through its IDEAS fund, and Katiso Renewable Energy. The new owners increase the South African and BEE ownership of the two round one Renewable Energy Independent Power Producer Programme (REIPPP) projects that began generation onto the grid in 2014. The transaction closed in November 2017 and is the first realisation of the eight LMSC renewable energy investments. LMSC has delivered on its targeted IRR and has proven its business case of realising projects at a premium once construction and early operational risk is substantiality reduced.

Marc Immerman, principal at LMSC said “This validates that our funds can deliver return outperformance from managing early stage development and construction risk effectively in clean infrastructure assets. In addition to the financial returns, the projects have implemented maths and science support programs, scholarships, teacher salary subsidies and we have driven an improvement in the ESG profile of the company during our holding period”.

Quarter 2, 2017

Elementum, signs agreements and awaits Competition Commission approval for Stockholm listed, Assa Abloy Limited to acquire Inhep Electronics Holdings Proprietary Limited. Assa Abloy is an international group with 47 000 employees and market cap of R300 billion. In South Africa, Assa Abloy is best known for the Yale and Union brands and has its head office and main manufacturing centre in Roodepoort, Johannesburg. Metier’s key investment value add was to drive Inhep’s expansion into Sub-Saharan Africa, showing sustained compound annual growth of 20% a year over the last seven years, with East and West Africa showing growth rates of closer to 40%. This feature proved to be one of the main attractions to Assa Abloy.

The shareholders of Astrapak Limited approved the R1 370 million offer from London Stock Exchange listed plastic products design and engineering company, RPC Group Plc and the unbundling and listing on AltX of Master Plastics, comprising the businesses of Barrier Film Convertors, Penninsula Packaging and Plusnet Geotex. RPC Group has over 21 900 employees, operates in 33 countries with 188 operating sites. Astrapak offers RPC Group entry into the Southern African Market. Master Plastics listed on 24 May 2017 and the Capital Growth Fund I will hold positions that begin to trade on 29 May 2017.

Quarter 1, 2017

The shareholders of the Sindila hydropower project are pleased to announce that the 5.25MW run of river project achieved financial close on 30 January 2017 and has commenced construction. The project benefits from a 20-year power purchase agreement with the Uganda Electricity Transmission Company Limited, supported by an implementation agreement with the Government of Uganda. Sindila has also benefited from the highly respected GETFiT Programme in Uganda, which is a partnership between the German development bank, KfW, and the Ugandan Government, designed to support the implementation of renewable energy projects.

Sindila has a 19 month construction phase and expects to be generating electricity in September 2018. The project is located in western Uganda, in the foothills of the Rwenzori mountains, which provide the regular water flow and steep descents providing the natural resource on which Sindila relies.

The shareholder consortium is led by Lereko Metier Sustainable Capital (LMSC) (at 87%) and includes the original developer, KMRI LLC USA; WK Power (WK) and Fieldstone Africa Investment Resources (FAIR). After entering the project in mid-2016, FAIR worked closely with KMRI and LMSC to support the development partnership to conclude the development activities on Sindila. Sindila is funded with a mix of debt and equity, with the Overseas Private Investment Corporation providing debt. Sindila also received financial support during the initial development phase from the Seed Capital Assistance Facility of the United Nations Environment Programme, which funded part of the early stage development activities.

Sindila is the first investment in east Africa for LMSC, a clean energy and resource efficient infrastructure private equity fund currently invested in wind, photovoltaic and concentrated solar thermal renewable energy projects in South Africa.

Michael Goldblatt of Metier said “On behalf of all the shareholders we would like to thank the Government of Uganda, the Electricity Regulatory Authority and KfW for their support via the GETFiT programme in getting Sindila to this stage. Sindila will bring national benefits in the form of additional renewable power generation to the grid and local benefits in the form of local employment, improved road access for local communities and a social responsibility programme to be established during operations.”

KMRI, the original developer, established the development and equity consortium for Sindila which is the first in their east Africa portfolio to reach financial close. Sindila is also the first project to be concluded by the recently established FAIR, which was formed in early 2016 to facilitate energy and infrastructure projects in Africa.

“We are pleased to be able to help bring this project to close for the people of Uganda and all the parties involved” said CEO of FAIR, Brian van Oerle. “This type of broad support for advanced projects is exactly what Fieldstone had in mind when it established FAIR; we bring a full toolkit to assist DFIs and sponsors to achieve success”.

WK with a 60 year background in construction across the continent is involved in the project as both a shareholder and the construction contractor.

Karl Kusel of WK said, “This project is really exciting for us as a group and perfectly matches our strategy of delivering projects as part of an integrated collaborative team rather than the traditional contracting model.”
Metier and Amethis Finance announce their partnership with Kenafric Industries (“Kenafric”), in the acquisition of a significant minority stake in their packaged food business. Kenafric was founded in 1987 by Velji Punja Shah and his four sons. The business has grown to emerge as a major FMCG group in East Africa, having diversified into confectionary, footwear, culinary and stationery manufacturing. This transaction is limited to the confectionary and culinary business and the Shah family will continue to operate the footwear and stationery business separately. Amethis has a long-standing relationship with the Shah Family and the transaction developed as a result of this relationship.

Kenafric enjoys a leading position in the packaged food sector, being one of the best known local FMCG brands in East Africa. Kenafric is engaged in the manufacture, branding and distribution of confectionary, snacks, ready-to-drink juices and culinary spices products. The company is unique in the packaged food sector in East Africa, having built strong entry barriers based on: (1) a capillary distribution network, (2) strong premium brands and (3) a Pan-African regional footprint. Kenafric sells around 45% of its production outside Kenya.

Kenafric has reached a critical size and now intends to expand into a regional packaged food platform, leveraging its existing strengths of an excellent route to market to broaden its product range and basket offering. The fragmented East African market offers a unique opportunity for acquisitions and strategic partnerships. The stated aim is to be able to supply the entire range of snacking products in a kiosk through adjacencies and brand extensions. Kenafric, Amethis and Metier have been working together on a promising acquisition pipeline.

“Having built a trustworthy relationship with Kenafric’s management over the past years, we are excited about this partnership which will allow Kenafric to leverage its strong existing base to expand into a diversified packaged food platform in East Africa. Thanks to this partnership, Kenafric is now poised to engage into a new phase of its history" said Jean-Sebastien Bergasse, the Amethis Partner in charge of the project. For Metier, a proven leader in Southern African Private Equity, this marks its first direct investment in Kenya. Metier enjoys a long and successful track-record in private equity investing in Southern Africa and has already realized and successfully exited similar transactions in the packaged food industry.

It is worth noting that the Shah family is bringing along external partners to the family business for the very first time, with the ambition to institutionalize the business and achieve its ambitious vision.

“Metier, as a partner to both the Shah family and Amethis, are glad and proud to seal a partnership with Kenafric to support the business’ future evolution while contributing to the development of the regional consumer goods sector” said Paul Botha, Metier’s managing partner.

“We are excited about the partnership with Amethis and Metier. Through this investment, we will seek to leverage the deep relationships that they enjoy in the region, operational support and a strong capital base to accelerate future growth”, commented Bharat Shah, Chairman at Kenafric.

BellHouse Capital, Pratul Shah and Bowmans Law acted as the Company’s transaction advisors while Anjarwala & Khanna and KPMG represented the investors.

This investment is aligned with the investment strategies of both Metier and Amethis to support family and entrepreneurially led businesses in their modernization and regional development on the African continent.

© 2022 Metier. All Rights Reserved. Metier’s Promotion of Access to Information manual is available on request. Metier Private Equity (Pty) Ltd, Lereko Metier Sustainable Capital Managers (Pty) Ltd and Metier Sustainable Capital Managers (Pty) Ltd are licenced Financial Services Providers (Licence No: 44882, Licence No: 44430 and Licence No: 48547 respectively) in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002 and have Conflict of Interest Management Policies as required in terms of Section 3A of the General Code of Conduct.
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