DEG – We finance opportunities
in future markets
DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH
DEG invests in Beloxxi
August 2016
Who are we?
DEG, a subsidiary of KfW
Founded
1962
Employees
526
Headquarters
Cologne
Shareholder
KfW, Frankfurt
New business
EUR 1.1 billion
Portfolio
EUR 8.0 billion
Equity
EUR 2.3 billion
Balance sheet total
EUR 5.8 billion
KfW IPEX-Bank
International
project and
export finance
KfW Development
Bank
Public Sector
financial promotion
KfW DEG
Private Sector
financing
KfW
›Ownership
German Government
›Rating
AAA/Aaa,
›Balance sheet:
€ 479 billion
›Ranking:
3rd largest bank in Germany
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With whom do we work?
Tailored financing for different customer segments…
Private Equity Funds
Financial sector
DEG`s
Customer segments
Corporates
DEG invests in Nigerian food producer
Project Financing (Energy + Infrastructure)
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What do we offer?
DEG`s range of financial solutions
Long-term loans
•Currency:
EUR, USD and some local currencies (ZAR, IDR, HKD, JPY)
•Term:
~4-15 years, depending on cash-flow and project risk
•Amount:
~USD 10-30 million (up to USD 100-150 million can be mobilized from other financiers on best effort
basis)
•Interest rate:
fixed or variable, market-oriented depending on tenor, project & country risk
Mezzanine finance
•Equity mezzanine:
Preference shares, fixed coupons with equity kickers (warrants, other performance-linked returns etc.)
•Debt mezzanine:
Subordinated debt, unsecured debt, partially performance linked returns
Amount:
USD 10-30 million
Equity capital investments
•Currency:
Local currency
•Term:
Long-term equity participation, usually with 5-7 year exit horizon
•Conditions:
Clear exit strategy; Significant minority stake with protection right; Active role e.g. board seat
•Amount:
USD 7-20 million
DEG invests in Nigerian food producer
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Who is Beloxxi?
Local
biscuit
manufacturer
founded in 1994.
Today is a market
leader
in
cream
crackers segment
Credible business
with track record
of consistently
improving revenue
DEG invests in Nigerian food producer
Family-run company
that utilises state of
the art production
facility
(German
technology)
Strategy has
historically been to
focus in savoury
biscuits where it has
excelled above
competition
Successfully
competing in a
large, high-growth
market (~EUR 1bn)
Facing rising,
undeserved
consumer demand
→growth
opportunity
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What was the appeal of Beloxxi to DEG?
Profitable
Sustainable
and Viable
business
model
Managerial
and
technical
know-how
Positive
developmental
impact
Strong
potential for
growth and
expansion
DEG invests in Nigerian food producer
Owner’s
equity
capital
Riskadequate
return
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What will DEG contribute with its investment?
Debt Relief (refinance existing
expensive loans)
Growth Capital (to finance increased
production capacity)
Company Optimization (strengthen
corporate governance, develop regional expansion
strategy, prepare company for IPO)
Value addition (implement Resource
and Energy Efficiency measures and promote E&S
standards)
DEG invests in Nigerian food producer
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DEG-Resource and Energy Effficiency Check
Energy
• Energy efficiency check
(technical optimization,
operational improvements)
• Analyze potential for alternative
sources of energy (e.g.
biomass)
Waste/Recycling
• Recycling of by-products and
waste
• Waste disposal system
Water
• Assess exposure to water risk
• Analyze water treatment and
saving technologies (e.g. water
recovery)
• Water management: irrigation,
process water
Land
• Reduce erosion and risk of
flooding
• Analyze organic fertilizers and
alternative plant protection
• Improve and maintain soil
fertility
Biomass
• Analyze economics and carbon
footprint of alternative use of
biomass e.g. as animal feed,
energy, fertilizer
Mineral & Fossil Resources
• Product development
• Reuse of industrial waste
(synthetic fibres)
DEG invests in Nigerian food producer
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DEG-Resource and Energy Effficiency Analysis
DEG invests in Nigerian food producer
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Positive developmental impact on Country
› Creation of sustainable jobs: company currently employs about 2,000 people. 300
additional permanent jobs will created as a result of this investment
› Increased tax revenues for Government: The projected growth in earnings will lead to an
increased tax revenue for the Goverment
› Structural transformation: the investment will transform the company from a familyowned business to a more institutionalised company that will be professionally run and
expected to become an attractive asset to strategic investors
› Foreign direct investment: providing long-term risk capital at a time of significant pull-back
in the midst of Nigeria’s worst economic crises in decades
DEG invests in Nigerian food producer
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Thank you for your attention!
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