TriLinc has provided financing to an electronics assembler in South Africa. Established in 2002, the borrower is a diversified contract electronics manufacturer that specializes in the production and assembly of electronic components for the telecom, utility, metering, and data acquisition industries. The borrower is utilizing TriLinc’s financing as a source of short-term liquidity to support the expansion of its telecom division through the purchase and import of manufactured cell phone and television components for assembly at its production facility outside of Johannesburg. Upon purchase and import of all component parts, the borrower completes the final assembly of cellular phone products for sale and distribution to the largest telecom operator in the region. Additionally, the borrower supplies finished television products to a leading South African government telecom agency responsible for promoting universal telecom access and services. Offered at affordable price points, the borrower’s finished cellular phone and television products aim to satisfy the growing demand of South Africa’s low-income population for access to modern communication and technology.
South Africa is classified as an upper-middle income country by the World Bank1 and is the only African country to have hosted the World Cup to date. Between 2010 and 2014, annual GDP growth rates averaged approximately 2.4%.1 South Africa’s main exports have traditionally been concentrated in gold, diamonds, platinum, other metals and minerals, and machinery and equipment.2 Conversely, the country’s main imports have been focused in machinery and equipment, chemicals, petroleum products, scientific instruments, and foodstuffs.2
South Africa meets TriLinc’s country standards for its performance across relevant growth, stability, and access metrics.3 In 2015, it ranked fourth in the Sub-Saharan African region on the World Bank’s Ease of Doing Business index4 and is recognized for its strong ICT infrastructure with a ranking of 22nd in the world for number of mobile telephone subscriptions.5 As the second largest economy in Sub-Saharan Africa,6 the country benefited from the $37 billion in net foreign direct investment that was estimated to have flowed into the region in 2014.7 Robust domestic demand across Sub-Saharan Africa helped spur GDP growth to 4.6% in 2014.12 Looking ahead, overall regional GDP growth is projected to strengthen to 5% by 2017.8
Additional Sustainability & Impact Highlights
- All of the borrower’s products are built in accordance with the ISO 9002:2008 standard for product quality and are certified by the South African Bureau of Standards.
- The borrower’s telecom division employs 200 workers, 95% of whom belong to previously disadvantaged groups, including women, who represent 90% of the division’s labor force.
- The borrower targets job creation and equal opportunity employment as a registered and independently certified Black Economic Empowerment Enterprise under the Government of South Africa’s Broad-Based Black Economic Empowerment initiative.
- As a responsible corporate citizen, the borrower makes donations to a local hospice facility and sponsors local sports programs.
1The World Bank, World Development Indicators Database, South Africa, 2015. 2CIA, The World Factbook, 2015: South Africa. 3There is no assurance that our investment in this company or this market will be successful. 4The World Bank, Doing Business 2016, Measuring Regulatory Quality and Efficiency, 2015. 5World Economic Forum, The Global Competitiveness Report 2015-2016. 6The World Bank, World Development Indicators Database, 2015. 7The World Bank, Global Economic Prospects, June 2015. 8The World Bank, Data, Sub-Saharan Africa, 2015.
The above information is as of the initial date of investment: August 6, 2015.
There is no guarantee that TriLinc’s investment strategy will be successful. Investment in a non-listed LLC involves significant risks including but not limited to: ownership is restricted; no secondary market; limitation on liquidity, transfer and redemption of ownership interest; distributions made may not come from income and, if so, will reduce the returns, are not guaranteed and are subject to management discretion. TriLinc selects investments and conducts operations on behalf of its clients, and will face conflicts of interest. Investment with TriLinc is not suitable for all investors. Securities Offered through CommonGood Securities, LLC, a member of FINRA and SIPC.
An investment with TriLinc carries significant fees and charges that will have an impact on investment returns. Information regarding the terms of the investment is available by contacting TriLinc. This is a speculative security and, as such, involves a high degree of risk. Investments are not bank guaranteed, not FDIC insured and may lose value or total value. Some investments may have been made in an investment vehicle that is no longer open for investment. The highlighted investment may or may not have been profitable. There is no guarantee that future investments will be similar.
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