30 April 2009
PME African Infrastructure Opportunities plc
("PME" or "the Company")
(AIM: PMEA.L; PMEW.L)
Investment and Financial Update
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.
Existing investment portfolio
To date, the Company has completed five investments in the telecommunications and transport sectors.
Dovetel (T) Limited ("Dovetel"):
Dovetel is a telecommunications start-up in Tanzania, aiming to deploy a network throughout the country using a CDMA technology platform.
Dovetel has largely completed Phase 1 of its network build and is currently in the process of configuring the billing system and performing the acceptance testing of the main network and customer premises equipment ("CPE"). Management of Dovetel is confident of and committed to a commercial launch before the end of June 2009 and, thereafter, building strong sales.
TMP Uganda Limited ("TMP Uganda"):
TMP Uganda is a telecommunications start-up in Uganda, aiming to deploy a network throughout the country using a WiMax technology platform.
TMP Uganda has completed Phase 1 of its network build and has been awaiting delivery of hard-to-source WiMax CPE in order to launch commercial services to the business community. A first batch of CPE is expected in the second quarter of 2009 and will allow the company to launch commercial services and expand its customer base.
Econet Wireless ("Econet"):
PME has invested in the expansion of a GSM telecommunications network in central Africa.
Econet has completed Phase 1 of its central African network build programme and "soft launched" its national commercial services in Burundi at the end of June 2009. The "hard launch" will only take place when SMS services have been enabled which is expected in the current quarter. Econet, however, has been able to attract an additional 4,495 subscribers in a single week without any marketing, which gives an indication of the level of potential demand.
Sheltam Grindrod Holdings (Pty) Limited ("Sheltam"):
Sheltam is a South African company providing engineering, management and operations of railway locomotives and privately-owned rail track, as well as owning and chartering small aircraft. It also repairs and maintains marine engines and small engine-generators.
Sheltam has recently identified an improved replacement for its current maintenance hub on very attractive terms involving no immediate capital outlay which should improve its ability to win business as it will be able to demonstrate its own suitable premises to undertake its full scope of offered services.
In addition, Sheltam is pursuing two initiatives in the rail sector in Mozambique and Angola and two in the power sector in South Africa and Namibia which are the result of a strategic decision to broaden business offerings.
PME Locomotives (Mauritius) Limited:
PME owns, via a subsidiary, twelve C30 2.8MW-rated locomotive units that will support mining, general freight and passenger operations throughout sub Saharan Africa. These locomotives were acquired from Sheltam Grindrod Leasing (Pty) Limited in anticipation that they would be leased primarily to the Sheltam group.
Six of the locomotives have been placed by Sheltam with third party clients and are rented by them from PME at the term sheet price. The remaining locomotives will either be sold, together with associated long term maintenance contracts (see below), or contracts will be sought to lease them to a mining or a network rail organisation in the same way as the rest of the fleet.
Transactions under negotiation
Transport:
PME has in place a Memorandum of Understanding ("MOU") to acquire, subject to finalising the due diligence, 100 % of a secondary, international airport in southern Africa. PME is in discussions with potential lenders and preferred equity partners to leverage its equity investment. The airport services the high end business aviation market and is the base for a significant regional low cost carrier. It is anticipated that contracts and funding can be agreed by the end of September 2009.
PME has been in discussions with a coal producer with regard to selling six of the Company's locomotives which would then be used to transport coal on a local network to a terminal in Beira, Mozambique. This appears to be receiving support from the relevant Mozambican and South African rail operators and government officials. It is anticipated that a decision will be forthcoming by the end of June 2009.
Mining:
The Company is looking at an opportunity to provide the infrastructure for a tin and lithium mining operation in the Democratic Republic of Congo ("DRC"). The opportunity would provide, amongst other activities, for the rehabilitation of a 12 MW hydropower station and for the introduction of a newly developed technique for "fingerprinting" ore to ensure that the project complies with international standards of governance. PME is, however, assessing the current and future stability in the country before proceeding further.
Energy:
An MOU has been recently agreed with the sponsors of a greenfield waste-to-energy project located in West Africa. The project aims to develop a solid waste treatment plant which will collect and process solid waste to produce renewable electricity and compost for sale. The MOU provides PME with a 3 month exclusivity period to allow the Company to conduct due diligence.
An MOU 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.
Financial Update
The completed projects have an equity requirement of US$89.5 million. However, if the remaining projects set out above are completed, this would utilise the balance of available funds, with an element of funding being leveraged to reduce some of this commitment. The potential sale of locomotives referred to above would also serve as a source of funding for future investments, within the parameters of the Company's distribution strategy.
On admission, the board of PME ("the Board") undertook to appoint an internationally recognised firm of accountants as valuers to perform an independent valuation of the Company's investments on a semi-annual basis. The Board is pleased to advise shareholders that the valuation exercise as at 31 December 2008 confirmed that the three portfolio investments completed in the six month period to 31 December 2008 have all been valued at levels consistent with, or above, their acquisition cost. Furthermore, the two portfolio investments that were first valued as at 30 June 2008 continue to command valuations at their respective cumulative costs of investment to date.
Further enquiries:
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.