Transaction Advisory. Deal Structuring.

FIRM PROFILE JULY 2016

Suppex Capital Advisory Limited

No.7, 4 Nasser Road
NIPA Area, Lusaka
+260 97 778 8603
advisory@suppexcapital.com


LangaisalsoacertifiedACIDealerandacertifiedStock
Broking and investment advisor. He is responsible for
Suppex Capital Advisory is a specialized transaction
overall strategy, product development and execution;
advisory firm focused on deal origination, deal
developingofinnovativedealstructurestailoredtosuit
structuring and private placements. The firm offers its
differentclientsspecificneeds.
servicestofinancialinstitutionsandselectcompaniesin
strategic sectors with strong growth potential and Langabringsover10yearsexperience,with7yearsin
bankable projects. Registered in 2015, Suppex was set depthknowledgeoffinancialmarketsandservices.Prior
upwiththegoaltoprovidelocalcompanieswithaccess Suppex Langa was lead of corporate banking at UBA
to alternative and affordable sources of finance as well Zambia. Previously, Langa worked in various roles at
as offer financiers with portfolio diversification Access Bank including Dealer, Treasury Sales and Team
opportunities.
Lead overseeing Financial Institutions and Telecoms &
ValueChainManagement.LangajoinedAccessBankin
While a relatively new entrant on the market, the firm 2009fromBATwhereheworkedasatrademarketer.
hasprovenexecutionininnovativedealstructuringand
private placement of debt with a variety of investors. IshmaelChingobeIshmaelisacharteredmarketer.He
Unlikeotherfirmswhichofferonesizefitsallsolutions, is responsible for client engagement, sales and lead
Suppex uses diverse private financing approaches generation. He is an accomplished sales practitioner
tailored to each clients unique needs and positioning. with experience spanning across various fields. He has
Wehaveexperienceinarrangingassetbackedfinancing, workedintheverycompetitivevehiclesalesindustryin
termdebt with money managers and pension funds, South Africa for over 15 years, including roles at BMW
loans with banks and finance companies, and other and Hyundai. He has experience in asset finance
structures.
structuredsolutionstailoredtosatisfyspecificneeds.

Overview

Suppex Capital Advisory was founded by four partners

who combine over 30 years of financial services sector
experience. Our teams experience spans across
corporate finance, structured trade solutions, and
treasuryandriskmanagement.

Mwenya Mukupa (IP) Mwenya represents our legal

advisors, Isaac and Partners, where he is managing
partner. A graduate of the University Of Zambia School
ofLaw,hewasadmittedtotheZambianBarin2004.He
has experience in diverse areas of the law with a bias
towardsconveyance,commercialandcorporatelaw.

OurTeam
SuppexCapitalisledbyaprincipaladvisorsupervisedby
theboard ofadvisors madeup ofitsfounding partners
whobringawealthofknowledge,networkandindustry
experience.

MwenyawasinvolvedintheCeltelZambiaInitialPublic
Offering (IPO) of 2008. He also provided advisory
services in the acquisition of Zain Zambia by the Bharti
AirtelGroupofIndiain2010.Heisaformerchairmanof
theCeltelZambiaPensionTrustandmemberofLAZ.

The firm has also established symbiotic relationships

with complementary firms. Our network includes fund
managers, lawyers and underwriters. The Suppex team
iscomplementedbyothersupportstaffresponsiblefor
the customer onboarding process which includes KYC,
and collation of information for financial analysis and
creditanalysis.Keymembersofourteaminclude:

J. Namushi Mwananyambe Namushi is specialized in

corporate finance structures. He holds a Bachelor of
Science in Banking and Finance from the Copperbelt
University and is currently reading for his Master of
ScienceinEconomicsandFinance.

Namushi has worked with Investrust Bank as an

investment analyst where he gained proficiency in
financial analysis, modelling and structuring of
Langa Mweene Langa, our cofounder andprincipal transactionsunderorganizationapprovedguidelinesand
advisor,isagraduateoftheUniversityofZambiawitha policies.BeforehiscorporatefinanceroleNamushiwas
part of the cash management and transaction banking
BachelorofArtsdegreeinDevelopmentStudies.
team.Heisaninnovative,selfmotivatedteamplayer.

Firm Profile Suppex Capital Advisory

Whatwedo
SuppexCapitalassistslocalcompaniestoaccessfinance
throughinnovativedealstructuringdesignedtoaddress
bothissuerandinvestorsprimarygoals.Financiershave
revealedthatmostcustomerswhofailtoaccessfunding
are turned away on account of poor presentation and
weakcasesforbankability.

Deep experience across various areas

of the financial services sectors

Havingworkedinthefinancialservicessectorinvarious
capacities, the Suppex team provides the strategic
thinkingandproblemsolvingcapabilitieswhichinvestors
and companies demand. We follow a consistent and
detailed approach to capture deal structure intricacies
and,inconsultationwithourclients,werepackagethese
transactionstoproduceabankableproposal.

Tailored transaction structuring suited

to clients specific needs and goals

Key relationships with investors able to

underwrite big ticket transactions

Asprivateplacementagents,wefacilitatetheplacement
process from beginning to end. Our services include
structuring our clients requirement into a bankable
request, preparing summary of terms and placement
memorandum,devisingamarketingstrategywhichmay
includeengagementofanunderwriterpriortoinvitation
of other investors to market the financing, negotiating
termswithinvestors,andexpeditingdocumentationand
closing.

Suppex Comparative
Advantages

Success based model; compensation is

tied to performance, dependent on
success

Ourmodelensures:
1.

Inordertomaintainfocusandcommitmentondelivery,
we operate under a success based model. Where most
firmsdemandanupfrontretainerfee,ourcompensation
isstrictlybasedonsuccess.

Faster decision making. We understand the

goals of both investors and issuers and can
quickly advise the chances of success on any
transaction.
As our engagement is success based, we seek
to minimize time spent on unbankable
transactions.

This model keeps our team motivated to delve deeper

and structure bankable solutions that unlock the full
potentialofourclientsrequests.

2.

Smarterstructure.Onceconfidentinchancesof
success of a transaction we start to work on a
bankable structure. We prefer to engage an
underwriter early in the process. Some
investors may desire risksharing structures on
largeticketdealsandtendtofindunderwritten
offersmoreattractive

3.

Expertise in deal structuring. We rely on our

deep industry experience and network to help
ourclientsucceedintheirgoals.Wetailorour
solutions according to the demands of the
investorsalignedwiththeneedsoftheissuers,
withrespecttosecurity,pricing,tenureandany
otherterms.

Mostfirmsdemandanupfront
retainerfee.Ourcompensationis
strictlybasedonsuccess.

Firm Profile Suppex Capital Advisory

WhoWeServe

CaseStudies

In order to achieve our goal of improving access to

alternative and affordable sources of finance Suppex
provides its services to both investors and companies.
Ourclientsfallintooneofthebelow

Suppex boasts a strong network with key relationships

established with strategic players such as local banks,
institutional investors, commercial and multinational
lenders, including development finance institutions.
Relying
on its network, the firm has successfully

executed transactions for the mutual benefit of both

1. Banks and Institutional Investors. For banks and
investors and companies. The below case studies
institutional lenders, including commercial lenders,
highlightthediversecapabilitiesofthefirm:
pension funds and development finance institutions,
we offer deal origination and transaction structuring DealStructuring:PrivatePlacementPensionfund
services. We perform complete KYC and initiate due
Experience
diligencetoultimatelydeliverdealsinaformatready
A local pension fund manager faced with the
for assessment. We help to reduce customer
prospectoffallinginterestrateswasseekinglowrisk
acquisition costs and only present already structured
investments with guaranteed returns to lock in a
transactionswithhighapprovalchances.
transactionatprevailinginterestratelevels.
With an indepth understanding of investor risk
acceptance criteria we aim to only deliver bankable
transactions that tick the set boxes. We understand
thatinvestorswouldtypicallypassonpoorlypackaged
transactions and not spend time attempting to
repackagearequestintoanacceptableformat.Wedo
the heavy digging and prepare bankable requests
which to the extent possible could be presented in a
format consistent with an investors internal credit
approvalprocess.

Solution
Suppex introduced an SME client with a healthy
marginonanawardedcontract.Tightliquidityinthe
market caused banks to shy away from lending to
businesses, particularly, under contract finance
facilities;borrowingfromreadilyavailablealternative
sourceswouldwipeawaythecompanysprofits
Weassuredsafetyofcapitalthroughanassetbacked
structurethatinvolvedalocalbankunderwritingthe
transactionand issuinga payment guarantee tothe
pension fund. The client assigned contract
receivables to the bank, which is best placed to
monitorandcontrolaccountactivity.

2. CompaniesandIntermediaries.Forprivatecompanies
lookingtoissuedebtweprovidetransactionadvisory
services. We get involved in the end to end process
which begins with us obtaining all necessary
information to understand the companys standing
andfutureprospects.

Result
The pension fund locked in a good return under a
very secure structure. Achieving both of its primary
goalsofcapitalprotectionandattractivereturn.

We then propose the most suitable deal structure

basedonourassessmentofthecompanyandrelying
onourknowledgeofinvestorriskacceptancecriteria

The SME client got access to funding in a market

withtightliquidity.Itprojectstocompleteitsworks
without any delays as there would be no need to
waitforpaymentstofinanceprogressiveworks.

For financial intermediaries we provide access to

credit line opportunities that can be utilized for on
lending. These are typically asset backed notes
secured against receivables. This provides a financial
institutionwithliquiditythatcouldforinstanceenable
it to extend support to SMEs under trade finance
structures.

Thebankunderwritingthetransactionbenefitsfrom
non interest income in form of guarantee fees, and
also gains access to significant amount of liquidity
both from the proceeds disbursed by pension fund,

Firm Profile Suppex Capital Advisory

Transaction Advisory: Refinancing of Commercial

PropertyLoan

Deal Origination: Offshore fund manager with

appetiteforsubSaharanrisk

Experience
A commercial property developer had a currency
mismatchbetweenitsobligationsandreceivables

Experience
A Dubai based investment bank and fund manager
was looking for exposure to subSaharan risk and
identified Zambia as a key entry point given its
relatively stable economic and political climate.
Whilethiswastheenviableandraresituationwhere
a cash rich investor had dollars looking for a home,
theminimumdealsizeofUS$10mprovedtobetoo
largeformostlocalcompanies.

We were approached to assist to help refinance a

kwacha loan, extend maturity and convert to US
Dollar.Thecompanyhadobtainedfinancinginlocal
currency and the proceeds were utilized towards
constructionofashoppingmall.Oncecompletethe
client was faced with two challenges, high cost of
borrowinginlocalcurrencyandshortmaturity.

Solution
Suppex through its local network came up with a
pilot transaction which would fulfil the investors
goalsandmeetthestrictriskacceptancecriteria.We
assembled a total of 3 local companies, which had
common directors and were each looking for
funding. Their separate requirements were pooled
together under one entity overseen by a majority
shareholder.Thesingleentitypresentedthefunding
requestfromtheoffshorefunderandwouldbethe
borrowerofnote.

Solution
The transaction was a vanilla commercial property
finance loan which we routed through a local bank.
Ourinvolvementinthetransactionincludedadvising
andnegotiatingforbesttermsfortheclientthrough
noting the risk profile and mitigation strategies as
wellassecuringotherancillarybenefitstothebank.
Keytothetransactionwasextendingmaturitiesand
reducing interest costs for the client. The rental
revenues collected with the property only 50% let
were not sufficient to cover repayments under
existingstructure

Securityforthisoffshoreloanwasapromissorynote
issuedbytheborrower.Inorderforthepromissory
notetobevalidithadtobeavailizedbyalocalbank,
as demanded by the lender. In turn the ultimate
beneficiaries, the 3 companies will issue counter
guarantees to indemnify the borrower of note. This
is secured against the respective companies fixed
andfloatingassets.

Result
The transaction was approved through a local bank
andwasstructuredtoachievetheclientsgoals.
Maturityofthetransactionwasalmostdoubled,this
eased pressure on the companys cash flows as the
monthly instalments effectively reduced to 50% of
the original. This affords the company enough time
to grow the occupancy to its targeted 85% on its
ownterms.

Result
The Dubai fund manager approved the transaction.
However,withfallingcommoditypricesontheworld
market and a volatile kwacha causing prices for the
Zambia Eurobonds to drop, the lender demanded
thatthefacilitybefurthercoveredwithaninsurance
wrapper.

Further the interest rate which was in the high

tweensinZambianKwachawasmorethanhalvedon
theUSdollarfacilitytoasingledigit.
Once we were able to obtain necessary approvals
fromacompetitorbank,theclientsoriginallenders
were motivated to reconsider the transaction and
agreed to restructure the facility in line with our
proposal.Thisfurthersavedtheclientfromincurring
newarrangementfeesandsecurityperfectioncosts

Notingthatthisrepresentedanadditionalcosttothe
borrower,wearebacktolookingforacosteffective
alternative security structure which will not erode
the benefits of accessing offshore funding at lower
cost.Thistransactioniscurrentlylive.

Firm Profile Suppex Capital Advisory

OurApproach

OurFees

We seek to provide more than just a check the box

effort to unlock value that is often buried under
misinterpreted financial metrics. And because we
understand that every transaction and every business
aredifferent,wededicateourtimetodiginandprovide
innovativesolutionstailoredtomeettheclientsneeds.

We have deliberately implemented a success based

modeltokeepusmotivatedandtonotlosesightofthe
ultimate goal. We conduct preliminary assessment at
our own cost to determine whether we can build a
bankable proposal for our customer. We only progress
whenwebelieveintheviabilityofanygivenrequest.We
havetwotypesoffees:

Ourexposuretobothinvestorsandinvesteesenableus
to take a 360 degree approach to problem solving. We
aim to develop bankable proposals that eliminate the
common headaches faced by investors in appraising
requestsoriginatingfromlocalcompanies.Wehavealso
foundInvestorstobemoreresponsivewhenspokento
in a language that they understand. We translate
companyrequestsintoabankableformat.

Success fee payable at successful conclusion of a

transaction and calculated as a percentage of the total
deal value. This is dependent on deal size and
complexityoftransactionandnegotiatedmutually.
Commitment fee this is payable only when we have
structured a transaction and have established proof of
bankability with demonstrable interest from prospects
suchasatermsheet.Thisistypicallyasmallpercentage
ofthesuccessfee.Itisnonrefundablebutrecoupable.

Confidentiality
We hold all information pertaining to client business and operations in the strictest confidence. This is well
stipulatedintheLetterofEngagement.Weshallmaintainstrictconfidentialitytowardsinformationobtainedwhile
carryingoutourprofessionalduties.

SkillandDelivery
ThefirmhastherequisiteskilledHumanResourceandbrainpowertodeliveronsetgoalsandexpectedoutcomes.
We believe that our culture and the support from our network and symbiotic partnerships enable us to stay
innovativeandoffersolutionsthatunleashhiddenvalue.Weseektoinvestinlastingrelationshipsthatdeliverlong
lastingvalueforclient,investorsandfirm.
Foranyclarificationsandtailoredpresentationofwhoweareandwhatwecanoffer,pleasecontactus.

Addressallcorrespondenceto:

ThePrincipal
SuppexCapitalAdvisoryLimited
No.7,4NasserRoad
NIPAArea,Lusaka
advisory@suppexcapital.com

Firm Profile Suppex Capital Advisory