With Amethis Finance having taken a 33% stake in Velogic, Rogers’ logistics activity sector now aims to create a regional platform integrating the trade routes between Europe, the Indian Ocean region and East Africa. As Luc Rigouzzo reveals, the European capital investment company intends to be a long-term partner, contributing to Velogic’s local and regional development.
photos : deeneshen sabapathee
Why does your capital investment company, Amethis Finance, define itself more as a long-term private equity stakeholder in Africa rather than as a simple investment fund?
During the last decade, Sub-Saharan Africa has become one of the strongest growth regions in the world and is experiencing demographic, urban and economic changes offering considerable opportunities for investment.
Within this context of strong growth, local companies need long-term capital and neither the African retail banking sector nor the emergent stock exchanges can adequately meet these needs.
Amethis Finance has therefore been structured on an investment-fund model with certain special features, which make it unique in the capital-investment sector.
Our strategy is to enter into long-term associations with African companies enjoying strong growth, having proved themselves and needing long-term financing. Above and beyond financial backing, we support them in defining their strategies and help them build strategic and financial partnerships, thereby creating value for our partners and investors. Our proposition is not limited to capital investment as we also offer long-term debt arrangements, thereby overcoming the difficulties a large number of African businesses still encounter in obtaining access to loans.
Our investment policy is highly diversified by geography and sector, which is essential in a continent where countries and sectors remain subject to strong volatility. This long-term strategy goes hand in hand with our high expectations in terms of profitability. It continues to attract a substantial number of investors because Amethis Finance – which closed its most recent fundraising offer in June – has an equity and debt investment capacity of more than US$500 million.
Could you briefly explain to us the origins of the partnership with Velogic?
It is all the result of our historical ties with Mauritius, which have enabled us to develop considerable interest in the country and a special attachment to it. Several members of the Amethis Finance team have had the opportunity to participate in a number of financing operations here and to accompany Mauritian companies in their earlier development activities on the continent for more than two decades. So far as Velogic is concerned, after our meeting with Rogers’ CEO, Philippe Espitalier-Noël, early in 2013, we quickly realised that we share the same values and that a long-term partnership between Artemis Finance and Velogic would be beneficial and fruitful by capitalising on our complementary aspects together with Velogic’s in-depth knowledge of Mauritius and the Indian Ocean region and Amethis Finance’s capacity to help it expand in East Africa and Europe. We’ve been working together ever since.
Apart from the injection of capital, what else will Amethis Finance contribute and what added value does Velogic bring with it?
As a long-term partner, Amethis Finance will contribute to Velogic’s local and regional development. Thanks to its large European and Pan-African network, its African savvy and its strategic and financial expertise, Amethis Finance’s presence will contribute to enhancing Velogic’s value, as by the construction of strategic and financial partnerships in Europe and Africa, the identification of potential acquisition targets especially on the African continent and the conquest of new markets. Amethis Finance is, moreover, an investor involved in a business’s management, represented on Velogic’s board for example, and actively involved in positioning a company strategically as well as in the decision- making process. What makes our partnership strong is the marriage of Velogic’s people skills and operational expertise on the one hand and Amethis Finance’s Pan-African and European network, as well as its financial expertise, on the other.
What prospects do the Indian Ocean-East African markets present to a logistics services provider like Velogic?
Many opportunities exist for an integrated logistics service provider like Velogic as a result of its one-stop
and diversified offer and its geographical position.
Mauritius can become a major Indian Ocean hub port,
destined to undergo significant development in coming
years. The extension of Mauritius’ container port
is indicative and will undoubtedly have a positive impact on Velogic’s activity and growth. Moreover, the
Indian Ocean and East Africa (Kenya, Tanzania and Mozambique) are markets where logistical and transport activities are not well developed despite these regions’ sustained economic growth and entrepreneurship.
The development of and diversification in African economies and the regional expansion of many Mauritian companies are creating new business opportunities for Velogic.
What are the main lines of the expansion strategy you intend to embark on together in the medium to long term?
Amethis Finance is working with Velogic to consolidate its position in its traditional markets (Mauritius, Madagascar, Reunion and France) and broaden its presence in the Indian Ocean region and Sub-Saharan Africa, especially East Africa. Eventually, Velogic is striving to create an integrated regional platform at the heart of the trade routes between Europe, the Indian Ocean region and East Africa. Velogic intends to re-inforce its position of leader in the Indian Ocean markets and adapt itself in an increasingly competitive environment. Obtaining contracts with new clients, the establishment of business partnerships and the strengthening of synergies amongst its various activities are some of the strategic lines we are working on together. Geographical expansion will occur through business partnerships and the acquisition of logistics companies already in East Africa.
What returns do you expect this partnership to provide?
For Amethis Finance, this partnership is but the beginning of a long association with Velogic, the Espitalier-Noël family and more widely Mauritius. There will undoubtedly be a financial reward, but what also motivates us is the long-term success of this partnership which will enable Velogic to further grow and expand.
What are the reasons for the environment being integrated into good governance practice?
The Amethis Finance team has a background resulting from the experience gained over more than twenty years of responsible investment on the continent in the French Development Agency, the International Finance Corporation and PROPARCO. Experience has shown us that creating long-term value in Africa, as elsewhere, is conditional on setting high standards of social and environmental responsibility. For us, therefore, a respect for social and environmental standards is a sine qua none condition for the long-term success of a company and its growth.
A specialist in project funding
With degrees in both Agronomy and Finance, Luc Rigouzzo began his career in Mexico. He then held leading posts in the French Development Agency (AFD), PROPARCO (a development financial institution partly owned by the AFD), and the International Finance Corporation. He has also served on the boards of several agribusiness companies and on the AFD’s executive committee, as well as chairing European Development Financial Institutions (EDFI). He is also on the board of Danone Communities, a social businesses network.
Luc Rigouzzo was CEO of PROPARCO from June 2006 to December 2010 and then chief of staff of the French Ministry for Development until 2011, when he founded Amethis Finance.
www.amethisfinance.com
