Botswana-based multi-national ecotourism company, Wilderness Safaris, operating nearly 40 luxury safari camps across eight African countries, has successfully raised a US$35 million bilateral loan for the purchase of a new ecotourism company in Kenya and for further expansion across Africa. The structured, multi-currency loan facility was led by Stanbic Bank Botswana and the proceeds will be deployed over several years in multiple currencies, thereby creating a natural hedge against foreign exchange risks. The transaction is one of the largest corporate deals in Botswana in 2016, and was fully funded by Stanbic Bank Botswana on a bilateral basis.
Leina Gabaraane, managing director at Stanbic Bank Botswana, said: “Our footprint across 20 countries on the continent provided Wilderness Safaris with an on-the-ground banking partner with regional and local expertise in the countries in which they operate, as well as countries targeted for future expansion.” As sole arranger, Stanbic Bank Botswana has been able to provide Wilderness Safaris with bespoke funding solutions that will help protect it from currency volatility as well as generate future growth.
“The ability to provide long-term funding in multiple countries with currency flexibility in a short space of time illustrates the complexity of the capital requirement needs of Africa’s emerging intra-continental service businesses,” said Gabaraane.
Wilderness Safaris is one of Africa’s premier ecotourism companies and caters primarily to an international clientele. The company is dual-listed with its primary listing in Botswana and secondary listing in Johannesburg. Their strategy is to invest in luxury ecotourism opportunities in order to build sustainable conservation economies that combine conservation of Africa’s wildlife heritage with the sharing of benefits with rural communities. They do this through working with governments and other stakeholders to entrench the true value of sustainable authentic ecotourism.
“In addition to reinvestment in flagship properties in Botswana and Namibia, the proceeds of this loan will be used for expansion across African markets such as Kenya and Rwanda,” says Keith Vincent, chief executive of Wilderness Safaris. “This is in line with our group strategic vision, which is to invest in African tourism markets which offer authentic wildlife and safari experiences and where we feel our specific ecotourism model can have positive conservation and community impacts.”
Wilderness Safaris places huge emphasis on the conservation of pristine ecosystems and the wildlife they hold, however they also combine positive conservation elements with human development programmes, thus far exceeding narrow biodiversity concerns.
Conservation activities such as ecosystem restoration and endangered species reintroduction are blended with community programmes such as training and education, as well as community-centric local employment. Similar to Wilderness Safaris’ multi-country geography and cross-border safari itineraries “our service banking model also drives regional integration, while equipping a broad set of African geographies with the foreign exchange earnings to address Africa’s liquidity challenges,” says Gabaraane.
Leveraging a loan for deployment across many camps in different countries presents a unique set of complexities. This is especially so since the funding will be required at short notice for use across a number of countries in support of its business operations – or to help address unexpected capital or liquidity events.
“This not only requires a bank on the ground in most of Wilderness Safaris countries of operation, but since the deployment of the loan will be a hands-on and a bespoke process, a bank with local personnel familiar with endemic operating and currency challenges in each environment was required,” Gabaraane added.
“This deal was especially significant for Stanbic Bank Botswana, which is part of Standard Bank Group, in showcasing its ability to find innovative solutions for home-grown African multinational clients committed to the continent and promoting local growth, even when these deals are somewhat complex and challenging to deliver in their detail over time,” said Gabaraane.