Introduction to GAIA Infrastructure Capital Limited October 2015
Contents 1. Proposed Investment Summary 2. GAIA Infrastructure Capital Limited 3. Closed Transactions 4. Appendix
Proposed Investment Summary
| Proposed Investment Summary 4 Business overview Gaia Infrastructure Partners (Pty) Ltd • A specialist investment manager whose primary business is managing investments in infrastructure projects in Southern Africa • Formed and incorporated in 2012 • Has managed segregated infrastructure funds Initial focus on utility scale renewable energy • Experience in secondary market participation in the SA REIPPP* • Strong pipeline of infrastructure and renewable energy projects Listing Gaia Infrastructure Capital Limited as Special Purpose Acquisition Company on main board JSE • Identified opportunities for the public market to invest • Targeted minimum R500m capital raise • Anchor investors to contribute a majority ( up to 75% ) • Management to contribute 5% of total capital raise * REIPPP = Renewable Energy Independent Power Producer Program.
5 | Proposed Investment Summary GAIA IC – Infrastructure Investment HoldCo • Diversified investment directly in large scale energy , transport and water related infrastructure • Provide investors with predictable, inflation linked and long-term investment in a listed environment • Open the investment channel of the SA Savings Industry to the infrastructure needs of South Africa • Create sustainable solutions with strong corporate governance adherence
| Proposed Investment Summary 6 Investment proposition Investment opportunity set Sector Opportunity Investment characteristics Deal flow • Purchase of equity stakes in operational / near-operational assets (secondary market) Access to REIPPP secondary market opportunities through • 20 year Power Purchase existing expertise Solar / Wind / Utility scale Agreements (PPA) , at inflation Hydro power linked tariffs with Eskom, Past transactions renewable energy plants guaranteed by National Treasury Networks with developers and equity owners • Hold investments for duration of PPA
| Proposed Investment Summary 7 Investment proposition Investment opportunity set Sector Opportunity Investment characteristics Deal flow • Purchase of equity stakes in Private-Public-Partnerships Access to opportunities through Roads / (PPP) on economic expertise and market knowledge Transportation Railways / infrastructure with contracted concessions Established relationships with infrastructure Ports leading advisors in the infrastructure • 20 – 30 year concession infrastructure investments sector agreements • Purchase of equity stakes in Access to opportunities through Private-Public-Partnerships expertise and market knowledge Piped water (PPP) on economic Water & sanitation networks / infrastructure with contracted Established relationships with concessions infrastructure water utility leading advisors in the infrastructure infrastructure investments sector • Concession agreements with Municipalities
| Proposed Investment Summary 8 Investment return profile Project investment stages Risk High Medium Low Equity IRR 100%+ CPI + 9% CPI + 6% Debt n/a Jibar/CPI + 4% Jibar/CPI + 2.5% Preferred Financial Commercial bidder close operation date Funding Development Construction Commercial production -2y 0 1y 3y 23y Red Stage: Orange Stage: Green Stage: Private Equity/Angel Investors. Private Equity with Bank Debt Mix of Institutional Investors with Debt from High Risk during construction Banks and institutions. (Project Development largely binary) Medium Risk Strong contracts normally mitigate operational (Risk of project delays during construction) risk.
9 | Proposed Investment Summary Investment criteria Criteria for investment options Operational criteria <6 Months to Operational Infrastructure Project or Operational Investment return target > 6% Real Return (before fees) Long-term inflation-linked income profile Predictable and transparent cash flows positive projects Size of opportunity Target investment size of more than R200m per transaction Minimum 15% equity stakes with minority protection Experienced management team with clear operational strategies No 3rd party credit risk exposure ESG appreciation Visible and responsible ESG policy appreciation
10 | Proposed Investment Summary Investment criteria (continued) Investment strategy and criteria Sectors Infrastructure including Renewable Energy, Transport, Water and sanitation Geographies Southern Africa Investment size R200m and above Control Management value add and directorships Gearing To be utilised on a case by case basis
11 | Proposed Investment Summary Key offer indications (continued) Proposed offer summary Listing Primary listing of a SPAC on Main Board of JSE Offer size Min. R500m placement • Anchors investors – up to 75% • Management – 5% Listing price R10 per share Target dividend yield CPI + 2.5% on NAV Estimated operating expenses (24 months) R15,6m (Including listing costs) Estimated market cap c.R500m at listing
12 | Proposed Investment Summary Dividend profiles of similar asset classes GAIA Infrastructure Capital target Dividend Yield of CPI* + 2.5% (c.8%) Proxy Avg 5 year DY% Current DY% CPI – 3.5% CPI – 3.4% FTSE/JSE Industrials Index DY CPI – 1.9% CPI – 1.9% FTSE/JSE Financials Index DY CPI – 0.1% CPI – 0.8% Growthpoint Properties Limited CPI – 0.6% FTSE/JSE Property Index DY CPI + 0.6% CPI – 2.3% FTSE/JSE Resources Index DY CPI + 0.5% Redefine Properties Limited CPI + 1.6% CPI + 0.9% GAIA Infrastructure Capital target yield CPI +2.5% * CPI 20 year rolling average Post 1994 = 5.83% Source: Inet BFA
13 | Proposed Investment Summary Key listing dates Anticipated listing timetable Monday, 26 October – Friday, 30 October 2015 Formal roadshow Opening of book Wednesday, 4 November 2015 Closing of book Friday, 6 November 2015 Anticipated listing date on JSE and Thursday, 12 November 2015 commencement of trading Note: Dates as indicated above are subject to timetable changes
GAIA Infrastructure Capital Limited
| GAIA Infrastructure Capital Limited 15 Listed investment structure Gaia Infrastructure Capital Limited (Co. to be listed on the JSE) 100% Gaia Infrastructure Gaia Financial Services Investment Partners Proprietary Proprietary Limited management Limited (Co. to hold underlying agreement projects) (Investment manager) Investee company 1 2 3
16 | GAIA Infrastructure Capital Limited Strong management team Directors Role Background Years of experience Qualified actuary; Founder GAIA 25 years Leon de Wit Chairman (Founder) Infrastructure Partners; Life, pensions and BCom, FIA, OPM (Harvard) savings industry expert Qualified engineer; Founder GAIA 20 years Non-executive director Botha Schabort Infrastructure Partners; Renewable energy (Founder) BEng Hons (Civil), Pr Eng, MBA developer, investment banker Qualified engineer; Corporate and project Clive Ferreira finance expert; Lead advisor on energy and 28 years Non-executive director BSc (Civil), BCom (Finance), infrastructure related projects on the MBA African continent Investment and Pensions expert; former 11 years John Oliphant Managing Director member of The PRI Advisory Council and BSc Actuarial Science, BSc (Hons) Chairman of CRISA Qualified engineer; global engineering 12 years Chief Investment Mich Nieuwoudt consulting experience; Renewable Energy Officer BEng (Electronic), Pr Eng, MBA Project Developer Qualified chartered accountant; Renewable 12 years Energy sector experience; Project Tamee Soudien-Witten Financial Director Management; Financial Management; BCom (Hons.) Acc, CA (SA) Employee Benefits experience
| GAIA Infrastructure Capital Limited 17 Board of directors EXECUTIVE DIRECTORS NON-EXECUTIVE DIRECTORS John Oliphant Leon de Wit BSc Actuarial Science, BSc (Hons) – MD BCom, FIA, OPM (Harvard) – Chairman Mich Nieuwoudt Botha Schabort BEng (Electronic), Pr Eng, MBA – CIO BEng Hons (Civil), Pr Eng, MBA – Director Tamee Soudien-Witten Clive Ferreira BCom (Hons) Accounting, CA (SA) – FD BSc, BEng (Civil), BCom , MBA (Finance) – Director Prudence Lebina BCom (Hons) CA (SA) – Lead Independent Director Romeo Makhubela BCom, PDM, UED – Independent Director Nathiera Kimber BA, LLB, LLM, HDip (Tax) – Independent Director Edward Mbalo BCom (Bus. Management) – Independent Director
18 | GAIA Infrastructure Capital Limited Investment management agreement Relevant provisions • Investment manager GAIA Infrastructure Partners (Pty) Ltd • Duration and term A period of not less than 5 years • Thereafter the agreement may be terminated with 12 months’ notice • originating, evaluating and investigating appropriate investment Services opportunities and exit strategies – advising the Group regarding structuring, managing and monitoring of investments – supervising the negotiation, preparation and review of all documents required in connection with the acquisition and realisation of investments; – monitoring the performance of investments – appointing professional consultants required by the Group – reporting to the board of GAIA Financial Services in relation to the business of the Group and the status and performance of the investments
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