Continent offers lucrative opportunities for investors

The African continent is the main area of focus for Rand Merchant Bank, the investment banking arm of FirstRand Bank, Africa's second largest financial institution and one of the largest companies listed on the Johannesburg Stock Exchange (JSE). Rand Merchant Bank, which is based in South Africa, has representations in numerous African countries where it has spent many years helping clients understand potential opportunities, and the challenges of doing business on continent. Its services include: acquisition finance, project finance, mergers and acquisitions financing and advice, debt and equity capital markets solutions, and financial risk management solutions.

"With prospects of high economic growth in many African countries, a growing middle class and improving governance, we are seeing the re-emergence of Africa as a region for investment opportunities and the consequent increased interest from global investors," says Rand Merchant Bank CEO Alan Pullinger. "We understand how the continent works and we provide a range of investment banking services to our clients to help them successfully source and conclude business on the continent."

Rand Merchant Bank's key focus in Africa is the resources sector, in which it has been involved since 1977, along with infrastructure development and the agriculture and telecommunications sectors. "We have experience in all commodities with our main thrust in terms of investment banking offerings being project finance solutions," says head of resource financing Henk Deist.

Rand Merchant Bank has done deals in more than 30 African countries in the past 15 years, most of which were in resources related businesses. Some of the larger resources transactions include: advising diamond mining company De Beers on the disposal of the Finsch diamond mine in Kimberley, South Africa; financial adviser, main underwriter and sponsor of the initial public offering and listing of Royal Bafokeng Platinum on the JSE; and acting as co-funder and lender for the expansion of the Morupule Colliery in Botswana; and Paladin Energy's uranium operations in Namibia. Some other deals in which it has been involved are joint mandated lead arranger for a project finance transaction for Anvil Mining in the Democratic Republic of Congo, lead arranger and underwriter for Avmin/Chambishi in Zambia, and lender to BP in Angola.

A natural extension to Rand Merchant Bank's mining business is upstream and midstream oil and gas project finance as Africa's contribution to global oil production increases each year. Rand Merchant Bank participated in the financing of the Jubilee oilfield in Ghana for Kosmos Energy and Tullow Oil and, most recently, in a pre-production financing facility for the Nigerian National Petroleum Corporation and ExxonMobil Nigeria.

Some infrastructure related deals concluded include: financing and advising a public-private partnership on the Lekki-Epe Expressway, a toll road in Nigeria; and structuring and financing the Adones undersea cable in Angola.