Overview

Altera Holdings structured and extended a USD 120 million blended debt-equity facility — the firm’s largest single transaction to date — to support the expansion of a diversified holding group operating across multiple business verticals in Zimbabwe. The transaction was structured through a purpose-built holding company incorporated outside Zimbabwe to address cross-border regulatory and transfer constraints.

Investment Rationale

The investee group demonstrated strong fundamentals across its existing business lines and a credible roadmap for entering new verticals. Following a site visit, Altera Holdings’ investment committee assessed the opportunity against its return thresholds and concluded that a blended structure would best align incentives and support long-term value creation. The transaction scale reflected the firm’s capacity to deploy significant capital in markets where conventional financing is limited.

Transaction Structure

The USD 120 million facility was structured as senior debt and equity participation, with the debt-equity split determined by enterprise valuation. All payments were denominated in USD.

Debt Component

• Interest rate of 8.5–10.5% per annum on a reducing balance
• 10-year tenor with a 12-month moratorium on principal and interest
• 72 equal monthly instalments commencing from month 13
• Disbursed in phases:
  • USD 25M at financial close
  • USD 30M after 6 months (performance-linked)
  • Further tranches based on borrower request

Equity Component

• Exit via IPO, promoter buyback, or replacement investor after year 5
• Buyback option from year 3
• Returns above 18% IRR shared equally through year 5
• IPO rights vested with Altera Holdings
• If no IPO, investee must source a replacement investor

Security & Governance

The facility was secured through a 1:2 LTV collateral package comprising full pledge of shares and convertible shares, hypothecation of free cash flows, corporate and personal guarantees from promoters, comprehensive risk insurance, and post-dated cheques. Altera Holdings nominated a board-level representative with voting rights limited to matters relating to the utilisation of invested capital. Lender-appointed auditors provided internal and statutory audit oversight.

Key Highlights

• Flagship Transaction: USD 120M — largest deployment demonstrating strong capital capacity.
• Cross-Border SPV: Structure designed to manage Zimbabwe regulatory complexities.
• True Moratorium: 12-month deferral of principal and interest for stabilisation phase.
• Performance-Linked Tranching: Disbursement tied to operational milestones.
• Aligned Returns: IRR sharing above 18% ensures investor protection with upside participation.

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