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AfricInvest Signs Debt Deal via Asoko Digital Engagement Platform

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Digital deal-making officially features in Africa’s investment landscape with the closing of the first deal originated on Asoko Insight’s Digital Engagement Platform, the premier service connecting companies across the continent with growth-enabling stakeholders. 

On 8 November, Ruai Family Hospital (trading as RFH Healthcare) a leading healthcare provider in Kenya, entered a strategic partnership with the pan-African asset management platform, AfricInvest, through its debt vehicle, AfricInvest Private Credit (APC).

Asoko Insight has been working with APC to originate debt opportunities via the Digital Engagement platform since November 2020, providing high-growth SMEs with a streamlined route into the pipeline, while at the same time cutting down the noise of early-stage origination activities for APC, allowing the firm to concentrate on deals already confirmed to meet qualifying criteria and standards.

Digitisation is already proven to increase efficiency and access to services across a range of sectors, with Africa, in particular, leading the way in the provision of digital financial services and innovative online logistics solutions. With the closure of this deal, the case for digitisation in deal-making is validated as a time- and cost-saving route to origination that democratises access to Africa’s investment ecosystem. Digital Engagement can support a faster and more efficient deal flow especially in the mid-cap space, where companies are most likely to face a financing gap and where access to funds can be especially impactful.

For the last 12 months, Asoko has fed 55 opportunities to APC, representing a total pipeline of close to $312 million. At 29% of completed submissions to the platform, the digital solution boasts higher conversion rates to qualified deals than can be achieved working offline. Having assessed opportunities against pre-set qualification criteria on the platform, timelines for the investment parties can be shortened. APC continues to use the platform to source opportunities.

Speaking on the deal, Rob Withagen, Asoko’s co-founder and CEO said, “We’re excited to see our hypothesis that digitisation supports more effective deal-making validated by the successful closure of this deal, which directs much-needed capital into Kenya’s health sector at this crucial time. Momentum is building on our Digital Engagement platform, which is increasingly recognised as creating efficiencies in the origination process and opening access to financing for a wider segment of Africa’s high-growth firms.

APC’s funding of RFH Healthcare represents the first time AfricInvest has directly partnered with a hospital in Kenya, pointing to the expansionary potential of digitising origination. The hospital group, which comprises eight facilities providing services from primary outpatient care to specialised and critical care services, will use the financing to expand its reach to other locations and solidify its working capital position.

Asoko’s Digital Engagement platform is utilised by a range of international stakeholders looking to connect with African companies. As well as origination, the platform supports growth-enabling services that offer increased visibility and transparency to aid business and investment connections. Partners include AfricInvest, UNDP, Afreximbank, Africa Merchant Capital, Trade and Development Bank and USAID-WATIH.

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Business

All Business Stakeholders Will Benefit from Stronger ESG Policies, Says GlobalData

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The age-old view that addressing environmental, social and governance (ESG) issues will make a dent in profits is a myth, says GlobalData. The leading data and analytics company notes that businesses that embrace all three elements of ESG will actually outperform their peers.

Cyrus Mewawalla, Head of Thematic Research at GlobalData, comments: “The reluctance of many CEOs to fully engage with sustainability can be attributed to the age-old view that it will hurt profits. However, GlobalData’s research suggests the opposite: CEOs that are too slow to improve their company’s approach to ESG will see an exodus of customers and a drop in profits far sooner than they ever imagined.”

GlobalData’s latest thematic report, ‘Thematic Research: ESG – Top Trends by Sector‘, notes that, while saving the planet used to just equate to implementing sustainable practices such as ‘limiting the use of plastics’ and ‘reducing carbon footprint’, ‘sustainability’ has morphed into an umbrella term that includes all aspects of ESG issues. The company proposes an ESG framework that identifies key areas in which companies should invest. One of these is climate change.

Luke Gowland, Analyst in the Thematic team at GlobalData, comments: “With COP26 setting the agenda on climate change, companies are focusing their efforts on tackling carbon emissions by switching to renewable energy and undertaking energy efficiency projets. However, companies must excel across all three aspects of ESG, and not overlook the importance of strong social performance and having the correct governance structures in place to achieve ESG goals.”

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Citizens, governments, regulators, and the media are turning the spotlight on corporations and demanding action. Social inequality, corruption, tax avoidance, and a lack of action on climate change are all issues that companies must now address head-on, in full public view.

Since Q1 2021,GlobalData has been asking respondents to detail their company’s approach to ESG goals In Thematic Sentiment Analysis, Q3 2021, conducted in Q3 2021, nearly a quarter of respondents thought that, for most companies, ESG was just a marketing exercise.

Gowland continues: “Our latest sentiment analysis report shows that more companies have changed their behavior to meet ESG goals (33%) than not (22%). While the attitudes towards ESG are improving, there is a long way to go.”

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Merger and Acquisition

Nvidia’s Arm Acquisition Now Highly Unlikely to Go Through

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Gartner semiconductor analyst Alan Priestly has said that Nvidia’s planned $40 billion acquisition of United Kingdom Chip Designer Arm is becoming more unlikely to be successful.

Priestly attributed this possible failure to the increasing number of regulatory inquiries which the deal is facing, also making mention of concerns in the United Kingdom, the European Union, the United States of America and China. Priestly said this to CNBC on Wednesday, with both Nvidia and Arm failing to respond immediately to a request for comment by CNBC.

The deal had previously eyed a completion date of March 2022, but the CEO of Nvidia Jensen Huang had admitted in August that the deal may go beyond the anticipated date.

Arm was born out of an old computing company known as Acorn Computers back in 1990. The energy-efficient chips designed by the company are used in about 95% of smartphones around the world and 95% of chips designed in China. The company was bought by Japan-owned SoftBank in 2016 for about 24 billion pounds ($32 billion), authorizes its chip designs to over 500 companies who use these chips when making their own semiconductors.

Critics have concerns that the merger with Nvidia – who is responsible for designing its own chips – could hinder Arm’s semiconductor designs which have been dubbed neutral, and may then lead to increased prices, less available choices and reduced innovation across the industry. Nvidia however argues that the deal will result in more innovation and that Arm will benefit from an increase in investment.

American chip giant Broadcom has publicly shown support for the deal, but many others remain against it.

Qualcomm has stated that Nvidia could proceed to limit the supply of Arm’s technology to competitors, or even raise prices. Bloomberg reports that Google and Microsoft have raised similar concerns with regulators.

The United Kingdom announced back in November that it would be launching a full investigation into the takeover of Arm by Nvidia, with the Competition and Markets Authority (CMA) investigating antitrust concerns and national security issues over the period of 24 weeks.

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Company News

Transcorp Plc Targets of 843MW Combined Capacity

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Transnational Corporation of Nigeria (Transcorp) Plc disclosed plans to increase the combined available capacity of its power plants Trans Afam Power Limited (TAPL) and Transcorp Power Limited (TPL) to 843 Megawatt (MW).

The power plants are currently undergoing upgrades and repairs. It plans to raise the average available capacity in the Trans Afam Power plant to 166MW and to 677MW in the Transcorp Power Plant.

The Group CEO, Owen Omogaifo spoke at the company’s third-quarter 2021 Analysts presentation and investors conference call and said the company would leverage strategic relationships to sell its stranded capacity through the West African Power Project (WAPP), through partnerships with DisCos, directly to eligible customers among other means.

She went on to say “60 Percent of the population or 117 million people have some level of access to grid electricity, With a generation capacity of only 32 percent, there is a large gap to be filled in the power industry. Given the gap in the sector and the increasing demand for electricity, the power sector remains an attractive investment choice. Our plants are undergoing significant upgrades and repairs that will significantly increase the available capacity by December 2021. We plan to have an extensive engagement with TCN towards resolving several transmission challenges which are affecting our generation and evacuation capabilities.”

She went on to present the company’s financial performance for the third quarter. The company grew its Profit After Tax by 672.1 Percent from N1.75 billion in the prior year to N13.5 billion while earnings rose by 57.4 Percent to N85.59 billion from N54.38 billion in the prior period.

Transcorp Plc is a leading diversified conglomerate focused on acquiring and managing strategic businesses that create long-term value and socio-economic impact. Its subsidiaries include Transcop Hotels, Transcorp Power, and Transcorp Energy. The company is listed on the main board of the Nigerian Exchange Group.

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