The UK’s British International Investment (BII) has signed off on a risk hedge to cover $1 billion worth of exposures on an investment into an Africa-focused technology services company.
BII is hedging the risk alongside a number of strategic players that have collectively invested in Safaricom Telecommunications Ethiopia.
The risk insurance also covers strategic investments made by UK-based Vodacom and Kenya’s Safaricom.
Japan’s Sumitomo Corporation, an investment holding company, and the International Finance Corporation (IFC) are also investors in the company. The two have however not been covered by the $1billion hedge.
IFC invested $160 million in the company in 2021, as part of $8 billion in growth plans.
The total deal value has not been disclosed.
Vodacom UK owned 87.5% of Vodafone Kenya, which in turn held 39.93% of Safaricom, giving Vodacom an effective holding in Safaricom of 34.94% as of 2022.
BII, Sumitomo Corporation, Vodacom and Safaricom channelled the deal though Global Partnership for Ethiopia BV (GPE) a special purpose vihecle set up for this transaction.
Vodacom UK is funnelling the deal through Vodacom International Holdings South Africa and Vodafone International Operations UK.
Safaricom Telecommunications Ethiopia has earmarked the initial investment for product development in a bid to launch 3G, 4G and 5G networks across the country.
This insurance is against the risk of expropriation, war and civil disturbance – and has a 10-year-tenor.
The Multilateral Investment Guarantee Agency (MIGA) is providing the insurance.
The deal also has a $ 95 million first loss protection from the International Development Association (IDA).
Tenbite Ermias, managing director for Africa at BII worked the 2022 deal.
Toshikazu Nambu, executive vice president & chief digital officer at Sumitomo represented the investor.
Headquartered in Addis Ababa, Safaricom Telecommunications is a telecommunications services provider in Ethiopia.
Created in 2021, the company is headed by chief executive officer Anwar Soussa and employs over 866 people as of 2023.
Deal Card
| Deal Name | Safaricom Telecommunications Ethiopia (2022) |
| PE Investors in Deal | British International Investment (BII), Sumitomo Corporation, IFC |
| Other Investors | Vodacom, Safaricom |
| Deal Year | 2022 |
| Deal Data ID | Available shortly |
| Portfolio Company Name | Vodacom |
| Primary Sector | Technology |
| Sub-Sectors | Telecoms |
| Country Headquarters | South Africa |
| Debt Investors | n/d |
| Investing Fund(s) | Bespoke request |
| Individual Investors | n/d |
| Investor Amounts | BII (n/d), Sumitomo Corporation (n/d), Vodacom (n/d), Safaricom (n/d), IFC ($160m) |
| Region | East Africa |
| Deal Size (Base Currency) | n/d |
| Deal Size (cUSD) | n/d |
| Deal Size (USD Numerical) | n/d |
| Deal Class | Large-Cap (larger than $100m) |
| Deal Stage | Venture Capital |
| Deal Structure | n/d |
| Aggregate Stake Size | n/d |
| Seller Type(s) | n/d |
| Sellers & Stakes | n/d |
| Use of Funds | Product development |
| Expansion Plans | Safaricom Telecommunications Ethiopia planned to use the initial investment for product development in a bid to launch 3G, 4G and 5G networks across the country. |
| Key People in Deal | Tenbite Ermias, Managing Director for Africa (BII), Toshikazu Nambu, Executive Vice President & Chief Digital Officer (Sumitomo), Nick Read, CEO (Vodafone), Shameel Joosub, CEO, (Vodacom) |
| Deal Advisors | Bespoke request |
| Previous PE Deals | Bespoke request |
| Deal Advisory Details | Bespoke request |
| Data Status | Submitted |
Source: Deal Book Africa
