The challenge
Growthpoint Properties Limited (Growthpoint), was looking for an efficient way to refinance its debt relating to the relatively recent completion of some of its flagship and environmentally-friendly new buildings. The ICMA Principals relating to sustainable finance provided an entity to either finance or refinance qualifying green expenditure through the capital markets.
The best manner to approach this was for the issuer to use more traditional building finance from banks and its own capital as the buildings were being constructed. The issuer then looked to the capital markets to refinance the total expenditure to ensure that the green instrument would have sufficient scale to attract investor participation for the completed buildings.
RMB solution
RMB proposed that Growthpoint leverage its Green Build Council of South Africa (GBCSA) Green Star Ratings to provide assurance to the investor community that the buildings that they were refinancing had adhered to the Green Building Council’s global scorecard for sustainability and efficiency.
All buildings included in the refinance were rated four stars or higher. This was socialised with the investor community on a multi-day deal roadshow in Cape Town and Johannesburg. This was followed by the financing of a triple-tranche transaction that gave investors a menu to access medium and long-dated credit in the issuer. The company’s auditor verified that the funds had been appropriately applied to refinance the corresponding related building expenditure.
Client benefit
The client was able to access new pools of liquidity, driving up the order book compared to a conventional bond. Growthpoint was able to issue a 10-year instrument – its longest public issuance at the time. More than 50% of the funding was in the 10-year instrument, pushing out the company’s debt maturity profile. The client now has an established Sustainability Finance Framework from which to fund new debt raising going forward.
| Client | Growthpoint Properties Limited (Growthpoint) |
|---|---|
| Size of the Transaction | R1.1bn in total:
|
| Sector | |
| Capabilities | Debt Capital Markets |
| RMB's role | Sole arranger and dealer manager |
| Country | South Africa |
Client challenge
Lesaka is a leading provider of payment solutions, financial services, transaction processing services and financial technology across multiple industries in several emerging economies. Connect Group was founded in 2006 and provides fintech solutions to about 44 000 small, medium and micro enterprises (SMMEs) in Southern Africa – many of which are in the informal sector.
As part of their transformational growth vision of becoming South Africa’s leading fintech platform, Lesaka looked at a 100% acquisition of the Connect Group – a profitable, high-growth and leading South African fintech company.
RMB's solution
RMB advised and provided Lesaka with a R2.35bn debt package with a five-year term facility to merge Lesaka and Connect Group and the remaining balance to be funded by existing Lesaka cash resources. RMB Corporate Finance Advisory used its expertise and knowledge of the business’ complementary product offerings to drive growth to advise Lesaka on the best method to provide the debt package.
Client enablement
The transaction will enable Lesaka to add nearly 44,000 micro, small and medium enterprises (MSMEs) in Southern Africa to its customer base. Many of these enterprises are in the informal sector and have historically been unserved by traditional financial services. Combining Connect Group's mostly informal client base with Lesaka’s existing fintech business and know-how will create a fintech group servicing the full value chain.
The acquisition also significantly expands Lesaka’s addressable market, merchant offering and footprint as it looks to build one of the leading fintech platforms in Southern Africa.
| Client | Lesaka |
|---|---|
| Size of the deal |
R4.8bn |
| Sector | Telecommunications, Media and Technology (TMT) |
| Capabilities | Corporate Finance Advisory |
| RMB's role | Sole adviser Sole funder |
| Country | South Africa |
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