Category Archives: Mauritius

Scangroup and Russell in Kshs 926M Mauritius Share Swap Deal

WPP Scangroup and its subsidiary Russell Square Holdings (Russell) and have entered an agreement for the purchase of Russell’s 3,660 shares in Research &  Marketing Group – a market research firm in Mauritius, that is owned by Russell. The shares represent 70% of the shares of the target firm and payment will be by way of 53.29 million shares of Scangroup which Russell Square Holdings (Russell BV) has subscribed for. 

It’s been a decade since the WPP deal to buy Scangroup and the new deal with Russell is meant to improve on client services at one of the largest marketing and communication groups in Sub-Saharan Africa.

WPP owns 50.1% of Scangroup, and after the share deal valued at Kshs 926 million (~$9.26 million), will own 56.25% of the company. Scangroup shareholders must approve the deal and WPP will also seek an exemption from being required to make a formal takeover offer as their increased equity position is the result of the strategic investment in Mauritius restructuring  their balance sheet. They also intend for the shares of Scangroup to remain listed at the Nairobi Securities Exchange (NSE).

Scangroup reported revenue of Kshs 4.1 billion (from billings of Kshs 14.1 billion) compared to 2016’s revenue of Kshs 4.8 billion (from billings of Kshs 16.3 billion) and a pre-tax profit of Kshs 696 million (compared to Kshs 725 million in 2016). The decline was attributed to the economic crunch and prolonged electioneering period in Kenya. Revenue from outside Kenya also declined due to cutbacks by clients, while digital and public relations were bright spots,  providing the greatest growth for Scangroup in 2017.

WPP Scangroup was trading at Kshs 16.95 per share on the NSE today and the deal comes a few years after the group also bought into Ogilvy across Africa. Scangroup has a Mauritius company that is the holding company for other subsidiaries incorporated outside Kenya including STE Scanad DRC, Scanad Burundi SPRL, Scanad Rwanda, JWT Uganda, Scangroup (Malawi),  Scangroup (Zambia), and Scangroup Mozambique.

$1 = Kshs 100

Depositary Receipts for Afreximbank Investors

Afreximbank, an African multilateral financial institution, is raising equity of up to $300 million and expanding its shareholder base by selling depositary receipts backed by Class D shares which will be listed and traded on the Stock Exchange of Mauritius.

The African Export-Import Bank (Afreximbank) depositary receipts private placement which opened on July 25, and today in Nairobi, representatives of the bank, State Bank of Mauritius (SBM Holdings), and CBA Group (Kenya) met institutional investors as Kenyan pension and fund managers are a key target for the offer. The depositary receipts have also been marketed to Nigerian investors.

Mauritius has long been a financial gateway to India, with over 1,000 funds there overseeing investments in India. But SBM Holdings Chairman Kee Chong Li, was proud to  say that the depositary receipts arrangement was a historic first for shares of  a pan-African bank, arranged by African advisers, to be listed on an African stock exchange.

Afreximbank, headquartered in Cairo, aims to narrow the trade financing gap in Africa, estimated at $120 billion annually by offering intra-Africa trade finance products including local content finance (Nigeria and Angola oil) , special risks finance, a countercyclical trade liquidity Facility (COTRALF – which has provided $8 billion to African central banks and commercial banks in 2016) guarantees, construction & tourism finance, and one for medical tourism.

Afreximbank has 135 shareholders in four different classes: Class “A”- comprising African governments, central banks (include Central Banks of Egypt (9.83%) and Nigeria (7.33%), Reserve Bank of Zimbabwe (6.74%), banks of Uganda and Ghana, governments of Nigeria (6.17%), Cote d’Ivoire and Kenya –  in total, 43 Class A shareholders  own 63% of the bank), Class “B” – African financial institutions (including SBM Holdings, Nigeria, Egyptian banks – National (6.62%), Misr and du Caire – who combined own 26%), Class “C” made up of non-African financial institutions (13 shareholders own 10% including China Eximbank (5.48%), Standard Chartered) and a new Class “D” open to individuals that was created in 2012.

Afreximbank has a $12 billion balance sheet which includes $10 billion of loans. For 2016, net interest income was$273 million, and net earning were $113 million – of which they paid $37 million dividends. In terms of their exposure, 68% of lending were to financial institutions, then 16% to the energy sector, while geographical, lending is 43% to West Africa and 42% to North Africa, then 7% to Southern Africa and 4% in East Africa.

About the depositary receipts:

  • New class D shares and the depositary receipts are aimed at sophisticated long-term investors such as pension funds and wealthy individuals.
  • The depositary receipts will be listed on the Stock Exchange of Mauritius.
  • The 6,977 Afreximbank Class D shares are the form of 69.77 million depositary receipts (every 10,000 depositary receipt supports 1 class D share).
  • This is a private placement, and the minimum investment is $30,000. It runs from 25 July to 22 September.
  • The listing will be on 4 October at Mauritius. Currently, Afreximbank shares are not listed anywhere, but, after Mauritius, they may consider listing the depositary receipts in Nairobi and Lagos.
  • Holders of depositary receipts will be entitled to receive dividends as class D shareholders
  • The shares are dollar-denominated which is a stable currency. The placement in Mauritius where there are no capital gains or dividend taxes, and, in addition, the SBM Chairman said that Mauritius will grant residency to (large) investors who buy $500,000 worth of depositary receipts.
  • The target for the Class D depositary receipts was $100 million from African investors, but they got very positive response from beyond Africa that’s more than double.
  • The deal is being handled by SBM Mauritius Asset Managers as the lead arranger, and co-transaction advisors are CBA Capital and Lion’s Head Global Partners.

SBM buys Fidelity Bank for $1

Yesterday there was an announcement that the SBM Group of Mauritius would acquire Fidelity Bank for the sum of Kshs 100 (~$1) and inject capital worth Kshs 1.45 billion into the bank afterwards.

This has also been confirmed and welcomed by the Central Bank of Kenya which notes that SBM Group is the second largest company listed on the Stock Exchange of Mauritius. As at September 30, 2016, it had an asset base of about Ksh.417 billion (US$4.2 billion).

The 29th largest bank at the beginning of the year with Kshs 15 billion in assets and a pre tax loss of Kshs 4 million. It had Kshs. 10.4 billion in deposits, and Kshs. 9.6 billion in loans and 14 branches. Fidelity has had a bumpy year as it was briefly linked with legal cases after the shutdown of Imperial Bank. Earlier in the year it announced talks with Duet Capital to invest Kshs 1.9 of capital in the bank as CBK also moved to quash social media rumors that the bank was being placed under receivership. This all now seems in the past with this buyout of the shareholders of the bank at no cost.

$1 = Kshs 101.

ALU: Africa’s University of the Future

The African Leadership University (ALU) is a pan-African university, which  aims to prepare students for jobs that don’t exist today. Their programs aim to equip students  with necessary skills including entrepreneurship, leadership, critical thinking, and project management – right from their first term. They have an intense online engagement process to monitor student performance that starts right from the time students apply and  through admissions, assignments, courses, exams and assignments.

Their current degrees on offer at their Mauritius campus are Computing (Bsc), Business Management (BA), Social Sciences (BA) and Psychology (Bsc) . It opened in September 2015, and has over 200 students from over 30 African countries.  Every year, students can get up to 4  months of internship at one of the ALU partner organizations which include Cellulant, Coca Cola, McKinsey, Tiger, IBM, PWC, Thomson Reuters,  Pernod Ricard and Swiss Re. The partners also help subsidize the cost of education at ALU where year of tuition and accommodation is about $,7000 – a modest amount compared to the cost of university education in many countries.

They also have a study abroad program that takes 4-12 months and ALU will have an MBA program at a new campus that will soon open in Rwanda, and for which they are already accepting applications. ALU is part of the Africa Leadership Group, and has founders including Fred Swaniker, Graca Machel and Donald Kaberuka. Eventually, they plan to have  25 campuses across Africa that can host 10,000 students a year.

ALU teams are currently on road shows to promote the university in Accra, Nairobi, Johannesburg, and Lagos. They have a workshops, schools visits, and other events this month as they promote the university, and they are accepting applications up to a deadline on June 5.

Dakar & Mauritius Redux

Updating previous visits by @Honoluluskye and @kkaaria, here are more travel tales from Dakar  and Mauritius  by @kahenya and @carolmusyoka respectively 
Dakar
Getting There:  My best bet on this would be to fly from Nairobi, through Addis to Bamako and then on to Dakar. Its a more comfortable ride than Kenya Airways (KQ) and from what I heard, has better quality of inflight services. KQ was delayed at take off and was not really worth it. Cost of the ticket return is about US$ 1400 + tax.
Senegal now has an Embassy in Runda, Nairobi – and it’s mandatory that you obtain a visa here, or you’ll get turned back in Dakar. The visa process is not really complicated, but also accept that there are numerous delays at the embassy, and book way ahead of your travel (about  3 weeks. The cost for the visa (for under 30 days) is Kshs 1,750 for Africans and Kshs 3,500 for non-Africans.
On Arrival: In Dakar, getting out of the airport was fairly easy; they scrutinize your visa and picture to ensure that it is you, but once you get your passport stamped, you are good to go. It took about 45 minutes from getting off the plane to getting into the hotel. There were no unexpected taxes or fees, and the cost of a taxi back and forth between our hotel, and the airport was about US$ 15.00.
Getting Around: I stayed in the hotel where the conference was so there wasn’t much commuting taking place. There are numerous ways to get around, from what seemed to be a well-built bus service, but more  common were small taxis which are very reasonably priced for the distances covered. 
Bring your French with you, and it will get difficult, so its always best to get the hotel concierge involved if you are uncertain about where you want to go, but for the seasoned traveller, walk out of the hotel, walk a bit of a distance and then flag down a taxi and you are guaranteed to get reduced rates. Walking is also a good way to get around, and I did that a lot, in the evenings when it was cooler.
Not once, did I feel insecure about walking around at night, and I did walk out as late as 1.00 AM. I was told to mind vendors who can be very pushy but that was it. I could not quite remember being warned about crime and did not see anything happen. Its quite a peaceful place.
Social Scene: For something good, expect to pay about US$ 200+ per night thought it may get affordable. In 3 days, electricity failed once for a few minutes and that was it. I ate dinner out twice, which cost about Kshs 1,000 per meal. There was a lot of fish involved, and rice. I randomly picked meals and they were quite good. 

I used a bit of extremely bad French and English. I did not ever once run into an English written publication. Everything was French. A lot of the Senegal people I met were more interested in telling me where their fabric shops were and talk about Gorée Island, but besides all that, did not quite talk much else. When it comes to Agriculture, I watched a news clip one evening, and if my French was right, the government was encouraging people to focus more on agriculture and was going as far as creating access to clean and safe water for consumption and agriculture.

Stay in Touch:  Making calls was a very easy. I bought a SIM card from Orange/Sonatel, put it into my phone, waited about 30 minutes for it to be activated and that was it. The network also has monthly BlackBerry packages, but it seemed overkill to buy that for 4 days.  Roaming from Dakar is expensive, hence the choice of buying a local SIM-card – and if you save your numbers in the + {country code} {number} format, it is as easy as dialing as if you are at home. Call quality was ok, but sometimes sounded poor as most of their international calls are routed through VoIP. 

Calling from Senegal across Africa and overseas seemed to be affordable, possibly the most affordable city in Africa! I topped up about Kshs 850 ($10) and that was more than enough for me to call Kenya, South Africa, China and USA every single day for a few minutes and text non-stop. I also managed to find the Tablet Cafe at Medina set up by Google which was impressive and the hotel had very good Wi-Fi hotspots that allowed for Skype access.
Odd Points:  The Senegalese are a bunch of really nice people, very warm and affectionate and really go out of their way to make you feel at home. What I found odd was that they also workout a lot, and right outside the hotel, you will find local joggers every morning and evening – more than I have seen anywhere else in the world. A taxi driver pointed to some senior government official going for a jog with 2 bodyguards one afternoon.
Somewhat related, the Minister of Communication, Telecommunications and Digital Economy, Cheikh Abiboulaye Dieye, impressed by arriving on time to give his speech, and then keeping to the allotted time without diverging into political rhetoric or making outlandish statements.
Going to Gorée Island had to be the highlight of the trip, seeing the actual guns used in the making of the movie, The Guns of Navarone, which were actual forward artillery pieces during World War II made it just about the best thing there is to see, but also learning (and seeing) about what slaves had to endure before being shipped off to the New World. Even the movies we watch today have nothing on the reality of what really happened.
Shopping & Sight-Seeing: There are many European style malls – like Sea Plaza which was right next to the hotel, which put places like Westgate and Junction to shame,. I guess many of this malls are there due to the proximity to Europe and actual real focus on investment as well as French and Arab influences which are easy to see. It shocked me that things there are quite affordable even in malls, unlike Kenya where buying some things seems to be a compromise if you are buying for a mall. I bought a lot of fabric and art work, as well as some books to read and catch up on my French.
I spent about US$ 500 for shopping and stuff, managed to get a bit of bowling done, went out for drinks and a cigar at some fancy lounge and stuff like that.
Biggest surprise about the Country? Honestly, after watching news clips about Dakar, I expected a downtrodden backward country, but that was not the case. Dakar is a beautiful and fairly well developed country. There were times you could not distinguish between being in Dakar and being say in Corsica or Ibiza due to the Mediterranean atmosphere. Their Duty Free was also very impressive, featuring a tobacconist where obviously, I had to make a stop and shop.

Mauritius
Getting There: You have two options; Nairobi-Madagascar via Kenya Airways, then Madagascar-Mauritius via Air Mauritius or a direct Nairobi-Mauritius flight on Air Mauritius.  Though direct flights are only on Saturday, Tuesday and Thursday, it is preferable as Madagascar is horrible, and can take up to five hours during which you wait in a room without food and drink. Tickets cost about $700
On arrival, there is no visa requirement just a yellow fever certificate requirement. It was a very busy immigration area but the officials are friendly.
Getting Around: There is a public transport system and taxis are available, but i didn’t use any as ii was at a conference. I also felt pretty safe getting around. They are insane about speeding and there’s deep respect for speed limits in designated zones as there are traffic cameras and strong penalties for breaches.
Communications: Do not use Safaricom roaming…..horrifically expensive. the hotel i stayed in was all inclusive and had Wi-Fi but it was very slow.
Social Stuff
– English is widely spoken. French too and the Mauritians are exceedingly friendly!!!
–  A good hotel will cost about 100 euros all inclusive and the electricity was quite reliable
– In terms of food, there is lots of Indian influence so a staple is rice and curry.
Shopping & sight-seeing: Port Louis market and Gran Baie lovely for shopping and hanging around – and there is plenty of tourist stuff to do like boat tours, swimming etc.
Biggest surprise about the country?  How small it was – 65 kilometers long and about  45 kilometers wide