Vantage Capital has announced an investment in Vumatel, worth R250 million. Vantage Capital, which calls itself "Africa's largest mezzanine fund manager", says it has disbursed the second and final tranche of a total R250 million ($16.6 million) expansion capital facility to Vumatel.
The funds will be used for the ongoing expansion of Vumatel's fibre-to-the-home (FTTH) network in a growing number of Johannesburg and Cape Town suburbs.
"We required a forward-thinking financial partner able to understand the industry opportunity and to structure an optimal funding solution for our stage of growth. We are pleased to partner with Vantage in what we consider to be one of the most exciting growth opportunities in the South African telecommunications industry," according to Niel Schoeman, CEO and co-founder of Vumatel.
"The provision of high-speed, quality broadband has been shown to have positive social and economic benefits for a country. Vantage is proud to support Vumatel to expand their network and to facilitate the provision of high quality broadband to more South Africans," says Luc Albinski, managing partner at Vantage Capital.
Vantage Capital says its Vantage Mezzanine Fund III facility was structured in two equal tranches of R125 million, to be drawn by Vumatel on the achievement of certain operational and financial milestones by the company. Since concluding the transaction in April, Vumatel has rapidly expanded its network and has exceeded the milestones required to drawdown both tranches of the total R250 million facility from Vantage.
Vumatel began deploying its open access FTTH network in October 2014, in Parkhurst, Johannesburg. Since then, the company has rapidly expanded its network to cover 22 suburbs, reaching more than 33 000 homes, with further network deployments planned.
This is Vantage's 22nd mezzanine investment and the fourth investment in Fund III, which is targeting a final close of R4 billion and has a 40% allocation for SA. Vantage Mezzanine Fund III supported the Servest buyout last year, and recently concluded a $20 million investment in Landmark (a Nigerian property group), as well as an N$80 million (R80 million) investment in UAG (a Namibian hospitality and property group).
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