/ 5 July 2005

Protea hotels stake sold to BEE consortium

Actis, a leading global private equity investor in emerging markets, and Comafin, a pan-African private equity fund, have jointly sold their 37,6% stake in Protea Hospitality Corporation (PHC) to a black economic empowerment (BEE) consortium, highlighting their joint commitment to South Africa’s empowerment imperatives.

The consortium, which was financed by the Industrial Development Corporation, comprises AKA Capital, the Police and Prisons Civil Rights Union (Popcru) Investment Holdings and the National African Women’s Alliance Hospitality Holdings.

Actis has been a shareholder in PHC since 1999. In 2000, it syndicated 50% of its stake to Comafin.

Peter Schmid, a managing partner of Actis, said: “Our investment in Protea has generated attractive returns and is an excellent demonstration of how we work with management to help them unlock value and build successful businesses by leveraging our African network.

“The tourism and hospitality sector remains attractive and we will consider further investments in this industry.”

Adding to this, Richard Robinson, CEO of Comafin, said: “At current exchange rates, our investment has generated an impressive 21,5% IRR and 2,6 times cash multiple in five years in United States dollar terms. I am pleased that we have been able to facilitate the transformation of this significant player in the hospitality industry.”

Actis partnered with Protea’s management to lead the group’s African expansion, being of particular assistance in Nigeria where Actis assisted with identifying appropriate sites and obtaining the requisite approvals.

The Comafin private equity fund was launched in 1996 by then president Nelson Mandela and is managed by an Actis-owned management company. Fund investors are predominantly international from Brunei, Singapore, the United Kingdom, Malaysia, Mauritius, Zimbabwe and Botswana, as well as the Development Bank of South Africa.

AKA Capital and Popcru were already investors in Protea, and Actis and Comafin’s exit has enabled them to increase their shareholdings.

Actis was awarded the Africa Investment 2004 Deal of the Year award for the BEE buyout it structured for Lenco.

Comafin, a 10-year closed-end fund, is focused on exiting from its investments and has already completed four this year. Another exit is anticipated for completion during July and Comafin’s international investors are anticipating an attractive return on their investment.

Actis and Comafin were advised by Chartwell Capital Group, which was instrumental in bringing about the successful completion of this landmark BEE transaction. — I-Net Bridge