4 August 2008
PME African Infrastructure Opportunities plc
("PME" or "the Company")
(AIM: PMEA.L; PMEW.L)
Update on Investments
PME African Infrastructure Opportunities plc, the AIM listed fund investing in infrastructure projects across sub-Saharan Africa, announces an update on progress in its investing activities.
Completed transactions
PME's first transaction in the telecommunications sector in Uganda was to acquire a controlling interest in TMP Uganda, a company whose strategy is to be the leading broadband provider in Uganda by delivering high quality broadband services utilising a WiMax technology platform. A US$2.5 million pilot project is proving successful, to date, and will be reviewed at the end of August. If the review is positive, an additional US$17.5 million investment by PME is likely to be made to expand the network nationwide.
The second transaction was the making of a US$26 million investment in Dovetel, a Tanzanian business aiming to provide a nationwide converged 3G network based on CDMA technology offering fixed-line replacement, data, broadband and value added services. The business plan has been approved (which has reduced the equity requirement to US$22 million), the management team is in place and a contract has been signed with ZTE, the Chinese manufacturer of CDMA equipment, to provide a fully operational network on a turnkey basis with the first phase due to become operational in December this year.
PME's third and fourth transactions have been announced today in a separate announcement. PME has agreed to acquire:
- a 50% interest in the share capital of Sheltam Grindrod Holdings (Proprietary) Limited ("Sheltam") for US$7.7 million. Sheltam's primary business is to lease, operate and maintain locomotives on behalf of mining companies in South Africa and railway companies elsewhere in sub Saharan Africa. In addition, it has aviation leasing and marine engine and small-generators ("Gensets") businesses with the latter expanding into the supply and maintenance of large Gensets to mining companies in South Africa adversely affected by the national utility's inability to maintain electricity supplies; and
- 12 new General Electric locomotives from Sheltam Grindrod Leasing for US$31.1 million. The purchase of these locomotives will complement other investments being contemplated by the Company including Sheltam to which some (and possibly all) of these units will be leased.
These two transactions are subject to approval by the South African Competition Commission, which is expected to be granted during August.
Transactions under negotiation
Telecommunications:
A third transaction in this sector that was mentioned in PME's final results statement, involving the expansion of a GSM network in the Great Lakes region, is now near to completion with the two remaining conditions likely to be met shortly. Subject to completion of these conditions, PME has undertaken to provide US$10 million of funding.
Transportation:
PME has been working with a major international logistics company to secure the management of a transnational rail concession. Local board approval has now been obtained for our partner to provide the management services and it is anticipated that PME will participate in the financial restructuring of the concession.
PME is working with another international transportation company to invest in the infrastructure and operations of a significant regional international airport in southern Africa. Our partner has a period of exclusivity to complete the transaction and will be providing the technical expertise to the project while PME will provide the funding for the transaction.
Housing:
Terms of a Memorandum of Understanding have been agreed to construct a high quality apartment building in a West African capital with the completed units to be acquired by international oil companies for their employees. PME's local partner owns the land and has secured planning permission and PME will provide the funding for the development.
Mining:
A Memorandum of Understanding has been agreed in principle for PME to invest in an aggregate crushing operation at two sites in a central African country with the primary offtakers being international companies building roads and residential compounds as well as a liquid natural gas plant.
PME is negotiating terms with a European company which owns mineral concessions to finance the infrastructure to mine cassiterite and lithium for sale to international companies.
Energy:
A Memorandum of Understanding has been submitted to the Government of an East African country which has established a commission to finalise terms under which PME will prepare a feasibility study and then build a 20MW hydro electric plant project with a strategic partner. This project is part of a World Bank supported regional power plan and will provide much needed generating capacity to the country.
Committed Capital and Pipeline
The completed projects have an equity requirement of US$82 million. However, if the remaining projects set out above are completed, this would increase to over US$190 million, exceeding funds raised on admission to AIM in July 2007, although PME would seek to reduce some of this commitment through leverage. Whilst focusing on the completion of the projects set out above the Company is pursuing a number of other opportunities in the transportation, telecommunications and energy sectors.
Further enquiries:
Principle Capital on behalf of Anne Dalen +44 20 7240 3222
PME Infrastructure
Managers Limited
Smith & Williamson Azhic Basirov +44 20 7131 4000
Corporate Finance Limited
Fairfax I.S. PLC James King +44 20 7598 5368
Bell Pottinger Dan de Belder +44 20 7861 3232
On behalf of
Helvetica (Isle of Man)
Company Limited Clara Parisot +41 798 249 788
Notes to Editors:
- PME African Infrastructure Opportunities plc ('PME') is a company investing in sub-Saharan African infrastructure and infrastructure related industries. Its shares were admitted to AIM in July 2007 raising US$180.45 million.
- PME was established to invest in sub-Saharan African infrastructure and infrastructure related industries with a view to generating attractive returns, principally through capital growth. It is targeting opportunities arising from years of under investment in sub-Saharan African infrastructure where that infrastructure will be instrumental in allowing the continent's economic development to continue to grow.
- The Investment Manager is PME Infrastructure Managers Limited ('PMEIM'). The Investment Manager is responsible for identifying new investment opportunities.
- PMEIM is a joint venture between Principle Capital Holdings S.A. (AIM: PCX.L), Unicos Partners LLP (holding company of the Helvetica Group of companies), Masazane Capital (Pty) Limited and the interests of Richard Bouma, CEO of PMEIM.