Mezzanine debt fund manager Vantage Capital Group has provided €19 million ($22 million) of mezzanine funding to Pétro Ivoire, a leading distributor of oil & gas products in Côte d’Ivoire. The funding enables the founding family, Kadio-Morokro, to regain a controlling equity stake in the company by facilitating the buy-back of equity from two exiting private equity investors, Amethis and the West Africa Emerging Markets Growth Fund.
The exit of the private equity investors has made room for a French-based gas trading company, Geogas Entreprise SAS, to take a stake in the business alongside the founding family.
This transaction represents Vantage Capital’s 27th mezzanine transaction across three generations of mezzanine funds, with its portfolio of mezzanine investments now spread across nine countries in Africa. Outside of South Africa, Vantage has now invested in ten transactions for a total of $138 million across Côte d’Ivoire, Ghana, Nigeria, Uganda, Kenya, Mauritius, Namibia and Botswana. However, Pétro Ivoire is Vantage’s first investment in Francophone Africa and the mezzanine fund manager is currently pursuing several opportunities in Morocco, hoping to announce its first deal in that country in 2019.
Mezzanine debt is an intermediate form of risk capital, which is situated between senior debt, the least risky tranche of the capital structure, and equity, the most risky. It combines elements of both debt and equity thereby providing companies with long-term funding on terms which are less dilutive to shareholders than pure equity.
“Vantage is proud to have structured the first-ever leveraged management buyout in Francophone West Africa,” said Luc Albinski, Managing Partner at Vantage Capital. “Vantage’s mezzanine product provided the ideal solution to Pétro Ivoire’s shareholders: enabling the private equity investors to achieve a successful exit and the founding family to acquire a controlling stake in their business without having to write out a big equity cheque.”
Sébastien Kadio-Morokro, whose father Mathieu founded Pétro Ivoire in 1994 said that the company’s vision is to be one of the largest African oil & gas distribution companies. “With Vantage Capital as our financial partner, we intend to entrench our position as the leading company in this sector in Cote d’Ivoire and begin to expand regionally,” he added.