Category Archives: Tullow

M&A Moment: BritAm, Centum, other East Africa deals

Britam and Centum have had a busy few weeks.
BritAmEA (i) Had an oversubscribed bond at the NSE that saw them raise Kshs 6 billion (ii) Completed the acquisition of 99% Real Insurance – giving them access to Mozambique, Malawi and Tanzania (the Competition Authority approved this deal with a caveat that they retain at least 85 of the 105 employees of Real) (iii) Established an office in Rwanda (IV) Britam will also pay about Kshs 2 billion for Equity’s 25% in Housing Finance.
Centum (i) Are proposing to acquire an additional 66% shares in K-Rep Bank (ii) Are seeking shareholder approval to create a Mauritius company, set up Kings Beverage, Bakki, Shefa subsidiaries, and also ratify the acquisition of 73% of Genesis & 30% of Broll (real estate) (iii) Ceded 42% of Two Rivers venture to investors at Kshs 6 billion, (iv) Are still in the running for Rea Vipingo offering Kshs 75 per share, over the Rea bid of Kshs 70 per share to other shareholders (v) Key Centum shareholder, Chris Kirubi said he wants to be a dollar billionaire
Other recent deals include
  • Kenya Airways to give Tanzania’s Precision Air a $10 million bailout. 
  • Waiting to see who will officially be FastJet’s partner will be for their renewed push to enter the Kenyan aviation market.
  • Hong Kong-listed Frontier Services Group completed the acquisition of 49% of Phoenix Aviation for $14 million (Kshs.1.2 billion).
  • Al Futtaim Auto to compulsorily acquire the remaining 8.4% of CMC shares from minority shareholders
Banking & Finance
  • Actis to acquire Compuscan, the largest independent credit bureau in Africa & run it as Credit Service Holdings with Michael Jordaan as chair.
  • Diamond Trust has an ongoing rights issue to raise Kshs 3.2B ($42 million) from shareholders at Kshs 165 per share.
  • Ecobank got investment bank approval in Kenya following their buyout of Iroko buyout and will target oil & gas, infrastructure & commodity deals. 
  • KCB is now a holding company, and is said to be interested in buying an insurance entity.
  • (edit) Kenyan Women Holdings will sell 25% of the shareholding of Kenya Women’s Finance Trust to their 600,000 members between September and October 2014. 
  • NIC Bank to have a corporate bond and rights issue during 2014
  • Atlas Mara to buy 77% of Development Bank of Rwanda 
  • National Bank shareholders to vote on if money from their upcoming rights issue can go to pay off preference shareholders
  • Western Kenya politicians have supported the creation of a new Mulembe Investment MFI bank, that will be part-funded by counties to serve 5 million people. 
Building & Cement
  • Holcim is set to acquire effective control of Kenya’s Bamburi Cement as part of the planned merger between Holcim and Lafarge. “The parties do not wish to see any change to the status of Bamburi as one of Kenya’s leading industrial companies listed on the NSE.”
Food & Beverage 
  • Danone bought 40%of Kenya’s dairy processing company Brookside which had revenue of Kshs15.4 billion (€130 million) in 2013. It was previously 90% owned by the Kenyatta family with Abraaj owning 10%. Brookside collects milk from 140,000 farmers and has 3,000 employees.
  • Distell of Stellenbosch South Africa got privatization approval from the Kenya government to acquire of 26% of KWA Holdings E.A. that was previously owned by ICDC  for Kshs 860 million (about $10 million)
  • Kenya Wines will also their Kshs126 millionUchumi Supermarket stake.
  • See Centum (above)
  • South African food company, Tiger Brands has dropped plans to acquire Kenya firms Rafiki Millers for $25m.
Health & Beauty
  • Procter & Gamble merged India, the Middle East and Africa into one IMEA region to improve execution.
Hotels & Tourism
  • The Kenya Competition Authority approved the acquisition of 100% of Fairview Hotel by City Lodge Hotels.
  • Kempinski Hotels, Europe’s oldest luxury hotel group has officially taken over Hôtel Des Milles Collines in Rwanda.

  • See Britam above
  • CIC had dropped plans for a rights issue in favour of a corporate bond
  • Liberty Kenya proposed to pay a Kshs 1/= scrip dividend, but shareholders can opt for cash.  
  • UAP had an oversubscribed bond that raised Kshs 3.1 billion against a target of 2B. 
  • Africa Report magazine listed insurance companies as the top performers at the NSE in 2014 (see table).
  • Kenyan firms Hamilton Harrison & Matthews (HHM) and Oraro & Company have announced they are to merge pending regulatory approvals.
Media & Communications
  • The $35 billion Publicis-Omnicom merger fell apart. The deal to combine the world’s largest advertising company was foiled by myriad difficulties, including who would run the new firm. The collapse of the deal is a win for WPP CEO Martin Sorrell, who campaigned aggressively against the merger of two of his biggest rivals.
  • A few months after his big deal with One Africa Media consolidating operations in Kenya, Uganda and South Africa, co-founder, Carey Eaton, was killed in Nairobi. See some tributes to Carey Eaton. The Economist also ranked the largest internet companies in Africa and One Africa Media topped this at $80 million, followed by Mobile Planet ($15 million) and Kopo Kopo ($10 million) 
  • passed away – some tributes 
  • Scangroup agreed to acquire a majority stake in a pan-African firm – the Experiential Marketing Group (EXP) 
  • The  Safaricom and Airtel buy out of (and split of) Yu appears to have stalled. 
Oil & Mining
  • In the last year, Tullow Oil and Base Resources have paid the Kenya government $22 million and $16 million respectively. 
  • Tullow received a  judgment in its favour over capital gains tax payments that Tullow had made onHeritage’s behalf to the Uganda Revenue Authority. In August 2013, Tullow received $345.8 million from Heritage in satisfaction of this High Court judgment.
  • Swala Oil & Gas completed their Tanzania IPO which was oversubscribed and will now proceed to list on the Dar es Salaam Stock Exchange (“DSE”). The placement of 13.3 million shares with 1,869 new and existing shareholders also allowed Swala to keep excess funds from Dar IPO.
Transportation & Utilities
  • Transcentury sold their 34% in Rift Valley Railways to Citadel Capital for $43.7M recovering their cash, but below fair value..they cited the delayed turnaround of the railway consortium as a reason for the sale.
  • Actis confirmed the sale of its stake in Umeme for $85.5 million to 20 institutional investors including Investec and Uganda’s NSSF
  • Kone Kenya acquired the business of Marryat & Scott, an elevator installation company.
Other Peoples Money
  • The Australian Navy seized heroin worth $296 million from a wooden boat off  the Kenyan coast.
  • The Karen Blixen house was put up for sale for $9.5 million 
  • Kenya’s NSSF had $600 million (Kshs 51 billion) in quoted securities as at June 2013 topped by Bamburi EABL and KCB.
  • The Competition Authority fined Tusker Mattresses (Tuskys) and Ukwala supermarkets Kshs 5.3 million while allowing them to continue pursuing a supermarket consolidation deal.

BritAm and Swala Investments

Last week saw the announcement of two new regional investment opportunities – one a new bond offer in Kenya and the other – an IPO in Tanzania – that both close on July 4.

BritAm Bond: Kenyan financial group Britam announced a Kshs 6 billion ($69 million) bond  which will be in two tranches starting with an initial target of Kshs 3 billion.

 Some excerpts from the bond prospectus 

  • There is a green shoe option of Kshs 1 billion in the first tranche.
  • Funds raised will be utilized in private equity, ICT development and local and regional expansion projects.
  • The minimum investment is Kshs 100,000 (~$1,150) with multiples after of Kshs 50,000.
  • The 5-year bond (maturing in July 2019) pays 13% a year (6.5% every six months). So if you invest Kshs 100,000, you will get an interest payment of ($) Kshs. 6,500 twice a year.
  • The bonds will be listed at the NSE for easy trading.
  • At the end of 2013, BritAm had Kshs 47 billion of assets, revenue of Kshs 15 billion and a pre-tax profit of Kshs 3.1b. They had Kshs 3.7 billion in investment property and Kshs 6.1 billion in listed companies. They own 21% of Housing Finance, 10% of Equity Bank and 25% of the Acorn group. They are acquiring Real Insurance for Kshs 1.3 billion (825m cash and shares  for the balance).
  • The bond issuance will cost Kshs 57m shillings – and Dyer & Blair get about Kshs 36M of this as the arranger gets (27M) and for the Placement (9M).

Swala Energy: Swala Oil & Gas (Tanzania) aim to raise between TZS 1.6 billion ($969,000) if they sell 3.2 billion shares and TZS4.8b ($4.8 million) if they sell 9.6 billion shares at TZS 500 each. The Offer is conditional on the Company achieving a minimum subscription of 3,200,000 Shares under this Prospectus, to raise TZS 1,600,000,000 (before expenses of the Offer). The Company may decide not to allot any shares and repay all application monies or seek a no objection to proceed with the allotment, in case the minimum subscription is not attained.

  • The minimum subscription is TZS 50,000 ($30) for 100 Shares. You can apply online, but a physical application form must be received at the brokers by 4th July.
  • Swala has total assets of $1.8 million in 2013 (up from $75,000 in 2012). Revenue in 2013 was $285,000 (up from $62k)  and loss was $5.5 million for the year (down from $1.26m the year before).
  • They are fundraising as they plan to spend $3.5M next year and $6M the year after.
  • A London broker values the company at $52.3 million based on 50% interest in Pangani (an area of 8578 sq. km worth $25.1m) and 50% in Kilosa Kilombero (an area of 8838 sq. km worth $36.3m). Otto Energy is a 50% partner in both of these ventures. 
  • The Costs of filing will be between TZS 210M and TZS 248M ($150,000) with printing costing 32M, accountants 40m (~25,000 to BDO), technical specialist (Risc Pty) 40M legal (Asyla) 16m, nominated advisors 27M (~$16,000 to Arch Financial if $3m is raised) and the Dar es Salaam Exchange gets 27M.
  • The Swala Energy prospectus gives insights on Kenya oil deals that are rarely public and which are used as a basis for valuation of these shares and for comparison as they are all in the East Africa Rift System E.g. Recent Kenya transactions (EARS ) include Marathon Oil bought aBlock 12A license from Africa Oil for $78.5M and a Block 9 license, Africa Oil bought a  Block 12A license from Tullow for $3.86M ($1,265 per sq. KM and Adamantine sold a Block 11B license to Bowleven for $10M ($1,429 per sq. KM).
  • In Tanzania, profits from oil are shared out as 45% government and 55% to the contractor when production is less than 12,500 barrels per day and when barrels are over 100,000 per day, the government gets 70% and the contractor 30%.
  • Swala has applied for approval to list on the Enterprise growth Market section of the Dar es Salaam stock exchange (they need 100 shareholders so list).
  • Swala will go from holding 74% to 61%  and new shareholders all have 10% with convertible noteholders with 7%.
  • Tanzanian Applicants will be allocated Offer Shares in priority to all other Applicants. Any Offer Shares remaining thereafter will be allocated to East African Applicants. Offer Shares will only be allocated to Foreign Applicants if they have not all been acquired by Tanzanian Applicants and East African Applicants.

Tullow Oil & Mining Payback in Kenya

Tullow Oil have just released their Kenya Report on their oil exploration efforts and local impact in the last year with special emphasis on the Turkana area.

And earlier, Base Resources who are a signatory to the Extractive Industries Transparency Initiative had also released their EITI impact report.In the last year, by their measure, Tullow Oil and Base Resources have paid the Kenya government $22 million and $16 million respectively in direct payments, and with more indirect benefits.  

Oil and mining are industries that are complex and expensive to set up, but which don’t generate a lot of direct jobs – some of their numbers include:

  • Last year, Tullow paid Kshs 4.1 billion (~$48 million) to Kenyan suppliers, $100 million to foreign suppliers registered in Kenya and another $100 million to international companies. Of the Kenya supplier amounts, Kshs 259 million went to Turkana business interests.
  • They still need Kenya petrol legislation. 
  • Estimated findings are 600 million barrels in South Lokichar alone.
  • Infrastructure Needs: Looking at an export pipeline and regional road and rail. Regional countries need to support an export pipeline, agree on what route will such a pipeline take, where the terminal will be (likely to be Lamu) – and who will invest/pay for this. The proposed underground pipeline will need to be a heated one, and at 850 kilometres will be the longest heated pipeline in the world.
  • Social Impact: Tullow have community resource offices in Lodwar, Lokori, and Lokichar – and this year, plan to double the Kshs 233 million ($2.75M) they spent on social projects in 2013, during which they faced community concerns and protests of local impact which even temporarily shut operations. They have provided 3,000 bursaries and scholarships and teaching materials for 50 schools.
  • Jobs Jobs Jobs: Tullow has 100 employees on-site, 70% of who are Kenyan. Another 2,000 are employed by their subcontractors/suppliers and 87% of these are staffed by are locals, and 59% by Turkana people.

Idea Exchange: Opportunities Galore: Blogs, Dust, Eggs, Interns, PhD’s, Oil, Social Media, Weddings

Some open opportunities to apply for; 

(Edit) African Banker Awards: The 2013 African Banker Awards competition is now on. Winners will be selected in categories of  African bank, African banker, best bank (in North Africa, East Africa, Southern Africa, West Africa, Central Africa regions),  retail bank,  investment bank , most innovative bank, socially responsible bank,  financial inclusion award, investment fund/private equity fund,  deal of the year, mortgage bank/product,  and brokerage house of the year. Deadline is 11 March.

African Development Bank: 2013 Internship Programme Session 2 – Provides students with an opportunity to acquire professional and practical experience at the African Development Bank and the Bank with a pool of potential candidates for future recruitment purposes.

Also, the #AfDB’s Regional Integration Dept is seeking junior consultants. Apply now.

PhD Fellowships from the African Economic Research Consortium  for people who have gained admission in 2013-14 to selected universities such as Cornell, Oxford, Ohio State or the Universities of Bonn, Sussex, Newcastle and others.  Apply through these university websites before April 30.  
The African Leadership Academy seeks to  enroll the most outstanding young leaders from across Africa and around the world. Deadline is February 28..

The African Leadership Academy also has the inaugural ‘African Teacher of the Year Award’ to celebrate teaching excellence on the African continent. The final 3 shortlisted finalists will be honored at a gala dinner in Johannesburg, South Africa in October in front of media, the headmasters of 100 of the leading schools in Africa, and other dignitaries. The winner of the award will also win a cash prize of $10,000. Nominate an outstanding African secondary school teacher- by the 31st of March, 2013 to

Aga Khan Foundation: International Scholarships – scholarships and loans for postgraduate studies in 2013-14 to outstanding students from the developing world. The Foundation assists students with tuition fees and living expenses only and half of the scholarship amount is considered as a loan, which must be reimbursed with an annual service charge of 5%. Application deadline is 31 March.

(Edit) Anzisha Prize 2013: Has $75,000 in cash prizes for youth entrepreneurs. Details here and deadline for the @anzishaprize is April 1.
BAKE: Kenyan Blog Awards 2013 awards aim to reward and recognize exceptional bloggers creating content in technology, photography, creative writing, business, food, environmental / agricultural, style, politics, corporate, sports, lifestyle, travel, new blog and others.  Deadline is February 1.
Big Brother Africa: BBA 2013 kicks off in May. To qualify, participants have to be above the age of 21 and speak fluent English.
Blackberry: Developers may apply for Built for Blackberry reviews and the $10,000 Developer Commitment before February 18.

(Edit) CNN Multichoice African Journalist 2013 is open to African nationals, working on the continent for African owned, or headquartered, media organisations and with work that has appeared in printed publications or electronic media that is primarily targeted at and received by an African audience. Deadline is 17 April 2013.

(Edit) The 10th edition of Diageo’s DABRA awards is now open. The Diageo Africa Business Reporting Awards will recognize journalists and editors who provide high quality coverage of the business environment in Africa in ten categories including ICT, finance, infrastructure, agribusiness / environment, tourism, best business story, business feature, newcomer, media of the year, and journalist of the year. Deadline is March 15.

(Edit) East Africa Philanthropy Awards: The 2013 EAPA awards from the East Africa Association of Grantmakers is now open for nominations in philanthropy categories for individuals, youth, faith-based, community, social entrepreneurs, and corporate philanthropy. Deadline is 30 March.
Egg Hatching Incubators are being lent to individuals and groups on credit, and with no interest charge. 
Faithful Frames: Win a free wedding photoshoot worth Kshs. 15,000 (~$175). Deadline is  Jan 28.

(Edit) Film Mentorship Program: Opportunity for talented young African filmmakers involved in directing, scriptwriting, production, camera, production design, sound design and editing, to enroll in a workshop where they will meet professional filmmakers from all over the world in September 2013. Details here and deadline is 1 May.

(Edit) The International Academy of Journalism 2013/2014 Fellowship program Journalism in the Digital World is now open.  Deadline is May 3, 2013.

Kings Pool Challenge League: EABL’s Pilsner brand is sponsoring a national pool tournament that runs from 21 January to May 4 2013.
(Edit) The 2013 edition of Mobile Web East Africa  is on later in February in Nairobi. Read more about the event.

Nestlé Prize in Creating Shared Value (CSV) seeks innovative programmes, businesses or social enterprises that innovate with impact in water, nutrition, or rural development. Deadline is March 31

(Edit) PivotEast: The third edition of this mobile startup showcase competition takes place on June 25-26 2013 in Kampala, Uganda, and it is open to  all companies in East Africa including South Sudan, Ethiopia, and Somalia. Competition will be in five categories of mobile finance, mobile enterprise, mobile society, mobile utility, mobile entertainment – and this year companies can submit a product in more than one category. The deadline for entries  is 15 April.

(Edit) Poptech: The 2013 Social Innovation Fellows program. Details here and deadline is 2 April.

(Edit) The Rockefeller Foundation Next Century Innovators Award series is now open. Nominate people or organizations that can win up to $100,000 for solving entrenched social problems. Deadline is February 28

Squad Digital: The digital agency is seeking an experienced digital business director with  knowledge of social SEO, Mobile (e.g. M-banking) 
TAHMO: Design a sensor that measures a weather or hydrological variable (temperature, wind, dust or lightning) and is both inexpensive and robust.  Deadline is 1 March 2013.
Tony Elumelu Foundation: Is seeking companies to place interns with for periods of  8-10 weeks. They should have revenue of $250,000 – $5 million per year and agree to pay for stipends while the Foundation will  cover the cost of recruitment, travel, and accommodation  
Toyota: Dream Car art contest dubbed “Your Dream—The Car of the Future” aims to create an opportunity for children (in 3 categories) —through drawing pictures of their “dream cars” —to develop their interest in cars. Deadline is January 31. 
Tullow Oil: The Group Scholarship Scheme will offer up to 114 scholarships across its countries of operation (10 for Kenya) for the 2013/14 academic year and these can be in engineering & tech., oil & gas economics, business journalism, law, and others. Deadline is 13 February. 
World Bank Africa: Social media internship – apply by responding to the phrase: #iwant2work4africa because..

Idea Exchange: TED, Tullow, Diageo, Kenyan Design Opportunities

Designer Opportunities (From the local newspapers)
– Design a logo for the Kenya Salaries & Remuneration Commission. First prize is Kshs. 150,000 (~$1,830) and D/L is March 30.
– Architects & artists are invited to design a new Kenyan courthouse. First prize Kshs 500k ($6,097) and deadline is March 16.
– Help design new Kenya banknotes & coins, with themes of Kenya reborn/ Kenya prosperity. The deadline April 13.

Diageo Africa Business Reporting AwardsThe 2012 edition of the DABRA business journalism awards is now open. Categories this year include ICT, finance, infrastructure, agribusiness, tourism, newcomer, media journalist and other awards, with March 23 as the deadline for entries.

Hewani: Get your mobile apps published for free at – including all android, nokia, WAP, Web & USSD versions (via @johnwaibochi)

Hitachi Foundation: Did you start your business before the age of 30? Is it 1-5 years old, and are you interested in lifting people out of poverty? If so, you’re eligible to apply for $40,000 from the Foundation’s Yoshiyama Young Entrepreneurs Program by March 30. (via The Unreasonable Institute)

TED: Worldwide auditions for speakers take place in 14 cities including Nairobi and anyone can apply as long as they have not spoken at a TED conference before. Inventors, teachers, artists, performers, change agents, story tellers and others are all invited to apply – details are here, and the Nairobi deadline is March 17.

Tullow scholarship: In partnership with the British Council Tullow invites applications for post-graduate training in oil & gas – drilling & well management, reservoir evaluation & management, energy studies with specialization in oil & gas, environmental science, oil & gas law. Details are here and the deadline is April 6.

Edit: Advance Africa is a useful resource of funding with a constantly updated list of scholarships & fellowships for African students.

Carnegie Mellon Rwanda: The Carnegie Mellon University’s college of engineering will have a Rwanda campus and from August 2012, they will offer a Master of Science in Information Technology. There are 50% scholarships offered to East African citizens who apply by the April 21 deadline.

The East Africa Association of Grantmakers has organized the East African Philanthropy Awards. Categories include family, faith, corporate, youth, reporting, and individual awards and the deadline to submit nominations is April 13.

Kenya Blog Awards: The Bloggers Association of Kenya (BAKE) announces BAKE Blog Awards with 14 categories including technology photography, creative writing, business, food, agriculture, sports, fashion, corporate, new blog, Tweep (best individual and corporate on twitter) and even politics! Entries are open till March 29 for entries to be submitted.

The 2012 Kenya ICT Board Connected Kenya awards have just been announced; they are thirteen categories, and the deadline for entries is 26 March.