Vantage Capital (VantageCapital.co.za), Africa’s largest independent mezzanine fund, announced this week that it successfully exited its $18.5 million mezzanine investment in Genser Energy, a management-owned, independent power producer.
Genser provides distributed power generation solutions in Ghana to multinational industrial and mining companies including Gold Fields Ghana Limited, Kinross Gold Corporation, and more recently, Perseus Mining Limited and Golden Star Resources.
Vantage’s exit was financed by a consortium of South African banks including Standard Bank, Nedbank and the Development Bank of Southern Africa which, alongside the Barak Fund and Africa 50, have committed over $230 million of facilities to the company for debt refinancing and further expansion.
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When Vantage invested in March 2013, Genser had built and operated two power facilities with a combined output of 35 megawatts. Vantage’s funding enabled Genser to almost double its capacity, by constructing a 30 MW power plant contracted by Kinross Gold Corporation’s mine at Chirano. With the support of local Ghanaian banks, Genser went on to complete two additional power plants at Gold Fields Ghana’s Tarkwa and Damang mines, adding substantial capacity to the company’s portfolio.
The additional debt now being provided by the incoming South African banks will enable Genser to further expand the total capacity of its existing plants from 100 MW to 190 MW. Genser also intends to build an additional 190km of natural gas pipeline to connect the rest of its power plants, and once completed Genser will have increased the onshore natural gas pipeline infrastructure in Ghana by nearly 160%.
Luc Albinski, Vantage’s co-Managing Partner, commented: “Vantage has realised an excellent return on its investment in Genser. The company has quickly scaled up to address the energy shortages in the country, and Vantage provided support to help bring about this vision. Genser’s ‘in-the-fence’ business model, whereby plants are constructed on the site of major clients underpinned by ten-year power purchasing agreements, has proved to be very successful.”
Johnny Jones, a Partner at Vantage, stated: “The Genser investment is a good example of the productive use of mezzanine to assist companies in achieving their growth objectives when banks have limited appetite to lend, without requiring significant equity dilution by the owners.
“Since Genser is a family owned business, the owners appreciated the fact that mezzanine provided them with growth capital which did not materially dilute their shareholding.”
Warren van der Merwe, Vantage’s co-Managing Partner concluded: “2019 has been a year of significant realisations for Vantage. This year we have exited Timrite, a mining supplies business, Austell, a pharmaceutical company, and now we have achieved a third significant exit with Genser. In aggregate we have returned $318 million to investors across 11 exits.”
Frances Rogoz, Vice President of Project Development for Genser, acknowledges Vantage’s role in the growth of the company: “With Vantage as an early-stage mezzanine investor, Genser was able to access capital that allowed us to kick start a period of rapid growth. The strong return we are able to provide to Vantage is a testament to that growth and to the robust energy sector in West Africa in which we operate.”
