Vantage Capital (http://www.vantagecapital.co.za), Africa’s leading mezzanine debt provider, announced that the DEG - Deutsche Investitions- und Entwicklungsgesellschaft mbH (“DEG”) and four other European investors are contributing a total of approximately $60m to Vantage’s third fund. DEG’s commitment to Fund III is $20m. In addition the DEG is providing $15m to a co-investment with Vantage in Surfline Communications, the leading 4G LTE network operator in Ghana. Vantage invested $15m in Surfline from its second fund late last year.
Gunnar Stork, Director Equity & Mezzanine for Africa and Latin America, said “DEG is excited to partner with Vantage in the investment in Ghana. We believe that the investment in Surfline will contribute to improve internet connectivity in Ghana and as such be an important factor to bridge the digital divide. In addition we are pleased to continue our partnership with Vantage in general by investing in Fund III, after having already been an investor in Vantage’s first Mezzanine Fund. We believe in this existing asset class on the African continent and see it as an important instrument to facilitate economic growth in Africa.”
The funds committed by DEG to Surfline will be used for the on-going expansion of the company’s 4G LTE network in Ghana as well as to enhance its product distribution and marketing capabilities. By deploying the first 4G LTE mobile network in Ghana, Surfline is able to offer high-speed internet connectivity (up to 10 times faster than the average speeds offered by the existing mobile network operators) at pricing that is competitive with existing internet service providers. The network achieved an extremely successful commercial launch in August 2014 and is experiencing tremendous growth in its customer base. Surfline was recently nominated for "Breakthrough LTE Entrant" at AfricaCom in South Africa and won "Top Emerging Brand" at the Top Brands Awards in Ghana. The investment in Surfline by Vantage and DEG was nominated by Dealmakers Magazine for “Private Equity Catalyst Deal of the Year.”
Colin Rezek, Managing Partner at Vantage, said “We are extremely pleased to receive the strong endorsement of DEG for our third mezzanine fund, which will employ a pan-African investment approach to focus on high-growth markets such as Ghana, Nigeria, the East African Community members and some of the Southern African Development Community (SADC) countries.
DEG joins other investors that have already committed funds to Vantage, including a major South African pension fund and foreign investors such as the Swiss Investment Fund for Emerging Markets (“SIFEM”) which is advised by Obviam. Obviam’s Chief Investment Officer, Andrea Heinzer stated: “Based on Vantage’s robust and positive track record in South Africa, we see Vantage Capital as the ideal partner for SIFEM to develop the mezzanine asset class in Sub-Saharan Africa.”
Vantage has made 12 investments in its second mezzanine fund, of which about 90% of available funds have been invested. More than half of the capital deployed has gone into growth projects such as Surfline. Vantage is targeting a final close of its third mezzanine fund at approximately $250 million later this year.
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About Vantage Capital
Vantage Capital Group (http://www.vantagecapital.co.za) was established in 2001 with funds under management of $12 million (R150 million) and now currently manages over $400 million (R5 billion). In addition to managing venture capital, mezzanine debt and renewable energy debt funds, Vantage also provides advisory and origination services through its debt capital markets division and makes proprietary investments using its balance sheet capital.
Mezzanine is an intermediate form of risk capital, which is situated between senior debt, the least risky tranche of the capital structure, and equity, the most risky. It combines elements of both debt and equity thereby providing companies with long-term funding on terms which are less dilutive to shareholders than pure equity. Website: www.vantagecapital.co.za
DEG, a subsidiary of KfW, finances investments of private companies in developing and transition countries. As one of Europe’s largest development finance institutions, it promotes private business structures to contribute to sustainable economic growth and improved living conditions. Website: https://www.deginvest.de/International-financing/DEG/
Surfline Communications is the first mobile telecommunications operator to deploy an LTE network in Ghana. As a wholly Ghanaian owned company Surfline was established to provide wireless broadband and related services to the Ghanaian market, including meeting the emergent and largely unfulfilled data needs of Ghana's businesses, government agencies, professional and academic communities and residential users. Surfline's vision is to see a Ghana where people and businesses experience true mobile broadband, and the possibilities it brings. Website: www.surflinegh.com
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