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Ascent Rift Valley Fund acquires major stake in Auto Industry for East Africa.
NAIROBI, Kenya--Ascent Rift Valley Fund (ARVF has signed an investment deal that will see it acquire a bulk Auto stake in Springs East Africa.
This deal is their 2nd funding in Kenya and first funding inside the automobile industry in the area. The Limuru-based factory produces a wide range of products for the motor assembly and vehicle spare parts industry to fit cars, trucks and SUVs.
ARVF will accumulate a majority stake in Auto Springs East Africa in a corporation with SFC Finance Limited (SFC). SFC is a non-bank financial institution providing short and long term secured loans and debt to SMEs in Africa.
“This investment has been done in partnership with SFC because they have shown increased interest in investing in East Africa and especially Kenya which has over the years embraced private equity funding. SFC has come in as a debt partners and the Ascent Rift Valley Fund will provide equity in this transaction” as confirmed by David Owino, Partner at Ascent Capital Advisory Services LLP during the signing of the deal.
ARVF expects to grow a foremost share in the growing auto industry with this investment. Ascent confirms that the financing would be used for product improvements and developments
“SFC is pleased to be a debt partner in this transaction, adding to its growing portfolio of financings in East Africa. In addition to meeting the financing need, we look forward to an active participation in the deal, helping Auto Springs to achieve its growth objectives,” as confirmed by Samia Tnani, Head of Credit Origination at SFC Finance limited.
With this Investment ARVF expects to gain a significant share in the growing automobile industry. Besides the capital going to acquiring the majority stake in the company, Ascent announced the financing will be used for product expansion and factory improvements.
“Partnership with Ascent gives us strength and ability to better serve the quality and service demands of our clients. Our long- standing relationships with organisations such as Isuzu East Africa and Simba Colt Motors demand constant investment in new plant and technology. Ascent’s investment moves us not only to improve our current processes but to also look aggressively into new product development,” said Mr. Salil Patel, Chief Executive Officer of Auto Springs East Africa.
The assembly industry has seen key players emerging in order to the change the assembly industry. Peugeot informed that reopening its car assembly plant with the target to produce more than 1000 units per year. Volkswagen has also started their plant at Kenya Vehicle Manufacturers, in Thika. In September 2017, Simba Corporation took in charge of Mombasa-based, Associated Vehicle Assemblers (AVA), with policies to increase production with their clients such as Scania, Volvo, Toyota Kenya and Tata. Foton Motors entered the market once again to join the assembly line at AVA, this year.