Overview

Altera Holdings provided a USD 20 million blended debt-equity facility to support a commercial tree farming and agribusiness operation in Uganda. The transaction was structured through a Special Purpose Vehicle (SPV) incorporated outside Uganda, enabling cross-border capital deployment while maintaining appropriate security and governance frameworks.

Investment Rationale

The investee demonstrated a well-established agricultural land base in Uganda’s Kalungu District with existing revenue-generating operations. Altera Holdings identified an opportunity to refinance existing bank debt, fund capital expenditure, and provide working capital to accelerate the business’s productive capacity across multiple verticals. The deal aligned closely with the firm’s focus on agribusiness in Sub-Saharan Africa.

Transaction Structure

The facility combined senior debt and an equity participation, with the final debt-equity split determined by enterprise valuation.

Debt Component

• Interest rate of 6.5% per annum, compounded annually on a reducing balance
• 10-year tenor with immediate commencement of repayment (no moratorium)
• 120 equal monthly instalments of principal and interest from month 1
• Disbursed in tranches:
  • USD 6M – debt refinancing
  • USD 5M – capital expenditure
  • USD 5–9M – working capital

Equity Component

• Exit via promoter buyback or replacement investor after year 5
• Buyback option available from year 5
• Returns above 18–20% IRR shared equally until year 7
• If no buyback by year 7, investee must source replacement investor

Security & Governance

The facility was secured through a comprehensive package including full pledge of shares and convertible shares, hypothecation of free cash flows, corporate and personal guarantees from promoters, and comprehensive risk insurance across sites, logistics, and key personnel. Altera Holdings appointed a board-level nominee with voting rights limited to matters relating to the deployment and oversight of invested capital.

Key Highlights

• Agribusiness Focus: Direct alignment with Altera Holdings’ core sector thesis in Sub-Saharan agriculture.
• Debt Refinancing: USD 6M used to refinance bank debt, improving the balance sheet.
• SPV Structure: Enabled efficient cross-border capital deployment.
• No Moratorium: Immediate repayments reflecting strong cash flow strength.
• Aligned Returns: IRR sharing above 18–20% ensures mutual upside.

This case study is for illustrative purposes only. Names and identifying details have been anonymised to preserve confidentiality.