What are the primary goals and focuses for BD Globe Capital?
While BD Globe Capital has been providing investment and smart capital solutions to the energy sector worldwide for years now, we have a particular focus at present on ‘upstream Nigeria’, no doubt having been of great interest to us for the last 7 years.
What is your day to day role? What is your favourite part of it? What is your least favourite part of it?
For the most part, we interact with fellow investors in London, New York, Dubai, across emerging African markets such as Lagos and other places where we today find the most opportune deals to be struck. A favourite aspect of mine is certainly fostering these deals, deconstructing them, looking at fresh angles for mutual benefit and finding clever ways of restructuring them.
In your opinion, what are the main hurdles to securing foreign investment for Nigerian banks and oil and gas companies?
The main hurdle is for sure the Forex issue, compounded by macro policies of the Nigerian Government and CBN. This is made worse by the lack of liquidity from banks to Nigerian upstream and service providers and lastly, due to the present shortage of Nigerian upstreams who adhere to best western practices.
What do you look for when considering whether to invest in a company?
Solid corporate governance, a solid management team, solid corporate structure and a solid balance sheet.
A key focus of yours is unlocking alternative funding. What alternative funding options are you finding that people are turning to?
Trillions of USD circulates around the world, but none of that capital will end up in Nigeria upstream unless companies adhere to the rules and interests of that capital. Thus, if I were a Nigerian upstream, I would consider: “What is an international institutional investor looking for? What boxes do I need to tick in order to get to the honey pot?” Chances are the answer is solid corporate governance, management, transparency, audited accounts. In short, adhere to best western practices if you want “western capital solutions”. Nigerian banks suffer from lack of liquidity and there is close to zero amount of private equity available within Nigeria, thus considering the facts above, it should be a total “no brainer” for Nigerian upstream companies who wants to thrive and survive to make themselves more forwardly attractive for global capital providers such as us.
Alternative capital solutions that we have executed are Nigerian Naira bonds, International bonds, Convertible loan notes, offtake agreements, risk service agreements, to name a few.
You have experience with raising capital for other sectors in Africa such as agriculture, technology and infrastructure. How does raising capital for oil and gas projects compare?
As long one have a decent hard asset with existing or imminent cash flow combined with top of the line management, we would consider investing. Oil and gas is easier to finance, as one has cash flows in USD.
Do you think it is particularly difficult to secure investment into Nigeria compare to other African countries?
We like Nigeria as it adheres to common law, but most importantly, the country has a lot of private assets with little state interference, thusly creating greater investment opportunity. Also, it is arguably the largest African economy with the largest population.
The intrepid investor can’t really ignore Nigeria.
What are your key tips and suggestions to those looking to raise financing in Nigeria? And in wider Africa?
Get a solid accountant and get audited accounts.
During the Nigeria Assembly (7th & 8th November in Lagos) you are speaking on a session that considers alternative methods of raising funding for junior and independent producers. What do you think are the key points that the discussion needs to cover?
- How to attract global capital?
- How to make a billion dollar US company? / What makes an upstream company attractive for investment?
- Financial tools applicable to Nigerian upstreams
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