Helios Investment Partners, a pan-African private equity firm, has invested $100 million for a 12.4 percent stake in Africa Oil Corp., according to a statement from the firm.
The investment comes as Helios seeks to raise $300 million for a dedicated oil and gas vehicle, according to a source familiar with the fundraising.
It is understood that Helios will use the vehicle to co-invest alongside its flagship funds.
Helios is seeing a number of good opportunities within the oil and gas sector, and due to restrictions regarding sector concentration they are not able to take full advantage of all of them using just their generalist vehicles, the source added.
Helios declined to comment on the fundraising.
Africa Oil is Helios’ second investment from its third fund, which closed on $1.1 billion earlier this year, exceeding its $1 billion target. The vehicle, which came to market in January 2014, held a first close on $355 million in March 2014. According to the firm, Helios III is the “largest fund dedicated to African private equity”, PEI reported earlier.
“Helios’ strategy focuses on investing in businesses that lead the provision of core economic infrastructure: de-bottlenecking the economy; increasing efficiencies; and reducing living costs for households and operating costs for businesses,” Tope Lawani, co-founder and managing partner of Helios Investment Partners, said in a statement at the time.
Canadian oil and gas company Africa Oil has assets in Kenya and Ethiopia as well as Puntland (Somalia) through its equity interest in Africa Energy Corp. It is listed on the Toronto Stock Exchange and on Nasdaq Stockholm. Its market capitalisation in Toronto was CA$950 million (€705 million; $785.5 million) at 3.59 pm on 4th May.
Helios’ investment will help to fund Africa Oil’s ongoing appraisal and development work programme in East Africa. The firm will nominate one non-executive director to the company’s board, the statement said.
“This is a flagship transaction for the firm to help develop Kenya's nascent petroleum sector,” Helios oil and gas partner Andy Bartlett said in the statement. “The capital is being deployed to further this exciting project which we consider to be world class in terms of potential. It has all the right characteristics for the sector in a lower oil price environment.”
This is Helios’ fourth oil and gas platform company, having previously invested in Impact Oil & Gas, Petrobras and Eland Oil & Gas.
Last summer Helios used Fund III to acquire a minority stake in ARM Pension Managers PFA, a subsidiary of Nigerian pension fund manager ARM Pensions. Financial details of the transaction were undisclosed, but a source close to the matter said Helios invested approximately $50 million.