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AfricInvest II Completes Broron Oil & Gas Investment
Afolabi Olorode - FBN Capital Limited
“This transaction will enable Broron to adequately position itself to take advantage of unfolding opportunities in the offshore support services space.” FBN Capital’s Afolabi Olorode discusses the recent investment in Broron Oil & Gas by AfricInvest II. folabi
Olorode is an Associate
Director and Head of Financial Advisory and Private Equity Capital Markets at FBN Capital. With 15 years experience in sub-Saharan
Africa, Afolabi has advised a diverse range of clients on corporate finance, M&A advisory and equity capital raise in local & cross-border deals valued at over $750m. Key sector experience includes financial services, power, telecoms, oil & gas and FMCG.
Afolabi holds a first degree in Estate Management from the University of Lagos, a Masters degree in Corporate & International Finance from Durham Business School, UK and he is an Associate of the Institute of Chartered Accountants of Nigeria. In addition, he has attended numerous courses locally & internationally, and more recently the Mergers & Acquisitions Progam at Wharton Executive Education. He has facilitated and sat as a panelist at several conferences/seminars. He has previously worked in senior roles with Emerging Capital Partners (ECP), Renaissance Capital and KPMG.
What more can you tell us about FBN Capital?
FBN Capital Limited is a full service investment bank and asset management company. We are a subsidiary of FBN Holdings Plc, one of the strongest and most dependable financial groups in Africa, with significant financial capacity and a strong tradition of governance. At FBN Capital, we arrange finance, provide advice, administer assets, manage funds, sell investment products and invest alongside clients; and we provide these services through five key divisions: Investment Banking, Markets, Trust and Agency Services, Asset Management and Alternative Investments.
What more can you tell us about AfricInvest’s Broron Oil & Gas Investment?
Broron Oil & Gas Limited is an indigenous oil and gas offshore services company which provides offshore support services to IOCs, Independents and indigenous upstream companies in Nigeria and the Gulf of Guinea. The Company commenced
operations in 2007 and currently runs offshore services contracts with Exxon Mobil, Total Upstream and Addax Petroleum.
The services provided by the Company include: Subsea engineering services, including subsea construction & maintenance services and subsea well hook-ups; Diving services including Remotely Operated underwater Vehicles (“ROV”) & survey services; Vessel & storage tank engineering; and Project management, logistics and procurement support services.
Africinvest Capital Partners is the Nigerian office of the Tuninvest-Africinvest Group, a leading Africa- focused private equity group with over US$750 million in assets under management. The Group has made over 100 investments across several sectors in Africa. Africinvest Fund II LLC is a Euro143 million fund launched in 2008.
Africinvest Fund II LLC invested the sum of US$20 million in convertible notes issued by the company. The objectives of the transaction included:
1. To enable Broron expand its fleet of vessels by providing the company with additional debt headroom for the required expansion capital
2. To enable Broron position itself to maximize the opportunity presented by the Local Content Act
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What was your involvement in the transaction?
FBN Capital provided advisory, structuring and equity raising services to the Company. This initially included the preparation of a detailed financial model, valuation and review of the business plan. We then prepared an information memorandum and invited a select universe of private equity investors. Upon review of offers, we opened discussions with a number of interested parties following which Africinvest emerged as the preferred partner.
FBN Capital successfully conducted a complex negotiation process which involved several
structuring complexities and valuation adjustment mechanisms.
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Were there any difficulties that you had to overcome?
The primary challenge was that it was the first time Broron was raising equity financing from external investors and we had to closely manage the expectations of the company’s management and shareholders. In addition, we had to adopt creative strategies to bridge the valuation expectations.
Is there anything else you would like to add?
FBN Capital is one of the leading providers of M&A and restructuring advisory, private equity capital raising in Nigeria and we closed 4 publicly announced deals in 2013. With our team of energy bankers, we have developed core competence in oil & gas and power, in addition to the traditional areas of financial services, but are also rapidly strengthening our coverage of other key sectors such as FMCG. We work with a strong network of strategic and financial investors and are able to assist them through the deal sourcing, acquisition and divestment phases of the investment cycle. FBN Capital has consistently led the market in project financing solutions and debt syndications. In 2013, we were involved as MLAs and financial advisers on transactions of over US$3 billion. FBN Capital was named best investment bank in Nigeria in 2013 by Global Finance, World Finance and EMEA Finance Africa Banking awards.
Contact: FBN Capital Limited 16, Keffi Street Off Awolowo Road S.W. Ikoyi Lagos, Nigeria
Tel: 234 (1) 2798300 Email: info@fbncapital.com