The deal is their first funding inside the automobile industry in the area and their 2nd funding in Kenya.
The Limuru-based factory produces a wide range of products for the motor assembly and vehicle spare parts industry including a variety of wiring harness, leaf springs, nuts, bolts and washers to fit cars, trucks and SUVs.
The Limuru-primarily based manufacturing facility produces a huge variety of products for the motor assembly and car spare elements along with a diffusion of leaf springs, wiring harness, nuts, bolts and washers for SUV’s, Cars and Trucks.
Ascent Rift Valley Fund 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.
He also mentioned that with this investment, ARVF expects to grow a major share in the growing auto industry. Besides the capital going to acquiring the majority stake in the company, Ascent announced the financing will be used for product development and plant improvements.
“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.
Major international players are entering the assembly industry to change the local assembly car industry. The prior year 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.