Bowman Gilfillan Africa Group’s Coulson Harney office in Kenya played a major legal advisory role in private equity firm AfricaInvest’s recent investment in the Silafrica Group, a deal widely considered to be an innovative example of how an African cross-border transaction can be successfully concluded.
Silafrica has operations in Kenya, Tanzania, Uganda, Ethiopia and India.
The deal, which was signed in March 2016 and expected to be completed this year, is aimed at extending the geographical reach of Silafrica’s investments into other African countries, using AfricInvest’s infrastructure and networks to do so.
Coulson Harney conducted the due diligence on the Kenyan subsidiaries of the Silafrica Group and coordinated due diligences through its East African Law Chambers office in Tanzania, its AF Mpanga office in Uganda, and through engaging local counsel in other jurisdictions affected, including Benoit Chambers in Mauritius and Mehrteab Leul & Associates in Ethiopia.
The team prepared the transaction agreements, including a convertible loan and share subscription agreement and a shareholders’ agreement.
“The transaction involved the Investment by AfricInvest Fund III in Silafrica Plastics and Packaging International Limited. Silafrica undertakes manufacturing of plastics and plastic packaging products and has operations in Ethiopia, India, Kenya, Tanzania and Uganda as well as various holding companies in Mauritius. The investment is to be made by way of a loan which is convertible into ordinary shares in the capital of the company,” explains Alex Mathini, partner in the Tax and Corporate/ Commercial practice at Coulson Harney. Mathini, together with Philip Coulson, headed the team that advised AfricInvest on the transaction. Silafrica was advised by the Tanzanian office of Clyde & Co.
The team is also assisting in fulfilling the conditions precedent, which include approvals from various competition authorities including the COMESA Competition Authority, the Competition Authority of Kenya and the Fair Competition Commission of Tanzania. Joyce Karanja-Ng’ang’a, partner and head of Competition at Coulson Harney, was instrumental in advising the client in this regard.
“This transaction is a good example of how cross-border deals in Africa should be structured from a competition law perspective,” notes Karanja-Ng’ang’a.
“Demand for specialist legal knowledge on the continent is strong. Investors are seeking advice and guidance in negotiating the range of legal and regulatory frameworks that govern investment in Africa. Many of the companies doing business in Kenya operate in several jurisdictions simultaneously and a significant number of them want to expand their networks into Africa. As such, we are finding that the demand for specialist cross-border legal advice is growing considerably. We are fortunate that our firm has extensive globally recognised, legal expertise to advise on these matters,” concludes Coulson.
Coulson Harney was recently recommended as a top tier firm in three practice areas by leading international legal research organisation, Chambers & Partners, with 13 of its partners also recognized. The firm also featured strongly in KPMG’s Deal Space East Africa Report for 2015, advising on 17 of the 36 deals included in the report. In addition, the Competition practice was ranked as ‘elite’ by global competition and antitrust publication, Global Competition Review (GCR), the only firm in Kenya to receive this ranking.