The Public Investment Corporation, on behalf of Government Employees Pension Fund, has announced plans to invest $250m (about R1.7bn) in the common equity of Ecobank Transnational Incorporated.

The firm, in a statement made available to our correspondent on Thursday, said the investment would represent its first major direct investment outside South Africa.

It said the move was in line with GEPF’s investment strategy that had identified Africa (excluding South Africa) as the next frontier for investment growth.

According to the firm, GEPF has allocated five per cent of its nearly R1tn of assets for investment in the rest of the continent.

GEPF’s Head of Investments and Actuarial, Mr. John Oliphant, said, “Our continent is ripe for investment. With over one billion people and a rapidly growing middle class, Africa, in tandem with the rest of the developing world, presents exciting investment opportunities for investors looking for good returns.

“With an almost stagnant growth recorded in developed economies, Africa has strongly emerged as the next frontier for investment growth.”

The statement noted that the transaction would bolster Ecobank’s tier one capital and further enhance its ability to grow its business across Africa.

It said the $250m share purchase would be affected by the issuance of 3,125,000,000 shares in Ecobank, representing 19.58 per cent of the total outstanding number of shares.

Following this investment, the PIC is expected to take a seat on the board of Ecobank.

The Group Chief Executive Officer, Ecobank Group, Mr. Arnold Ekpe, said, “We look forward to welcoming the GEPF as a shareholder. Along with our existing shareholders, we will now have a slate of highly reputable local, regional and international shareholders and our equity capital raising programme is coming to an end.

“Our unparalleled presence across sub-Saharan Africa and our knowledge of local markets will also facilitate the GEPF’s investment plans for Africa.”

The Chief Executive Officer, PIC, Elias Masilela, said, “We are excited about the proposed investment we will make in Ecobank. We strongly believe that this is a significant step that will complement the African strategy of our major client, GEPF, which seeks to take advantage of private equity opportunities on the continent.

“With this one investment, we will be immediately optimising our footprint on the rest of the continent, an action that would otherwise require multiple investments and huge effort as well as resource allocation.”

Source: Punch/Okechukwu Nnodim