Borrower Overview
 

TriLinc has provided financing to a supply chain service provider specializing in integrated solutions for the supply and maintenance of heavy machinery in multiple sectors across 18 countries in Africa. Through their established network of both local and international equipment, machinery, and parts suppliers, the company offers its customers a range of services across four main areas, including managed machinery and parts supply, component and machinery rebuild/refurbish programs, business process outsourcing, and innovative finance packaging. The borrower uses a proprietary “pay as you use” Vendor Managed Inventory system to allow clients to house borrower-sourced products on-site, therefore increasing ease of access to machinery and equipment in a timely and cost-effective manner and reducing inventory holdings and obsolete stock. TriLinc’s financing will be used by the borrower to supply necessary equipment (mainly truck and lifter, drill, and conveyor parts) and logistic services to a large industrial client located in Ghana. In addition to hiring local resources, the borrower’s partnership with the Ghanaian client aims to encourage local private sector development through the use of local Ghanaian equipment suppliers.

Access to New Products

Productivity & Competitiveness Improvement

Market Overview

Although the United Kingdom is a high-income country, an exception was made due to this borrower’s impactful trading operations, as it benefits exports to Ghana, a country that meets TriLinc’s standards for its performance across relevant growth, stability, and access metrics, in addition to over 15 other African countries.

Sub-Saharan Africa is one of the fastest growing developing regions, which has led to an increasing demand for importing infrastructure-related capital goods.¹ The compound annual growth rate of infrastructure related machinery, equipment, and transportation goods imports was 12 percent between 2000 and 2011.¹ Sub-Saharan Africa is seen by many international equipment providers as the most important construction equipment market for the next ten years.² The heavy equipment industry in Sub-Saharan Africa is underdeveloped and characterized by limited availability of high-quality equipment and parts. As a result, companies that rely on equipment for their operations are often compromising on equipment and parts of high quality and reliability for those that are readily accessible but have less than optimal performance. In an effort to counter this compromise, the borrower works with both local and international equipment, machinery, and parts suppliers to deliver logistical solutions to increase efficiency and transparency in the supply chain and ensure delivery of high quality products in a timely manner to its client base. The need for basic infrastructure investment in Africa is around US $100 billion per year over the next decade – a third of which is needed for maintenance.³

For Ghana specifically, capital equipment is one of the country’s main imports into the country.⁴ Large construction vehicles and excavation machinery make up 0.7 percent and 1.2 percent of the country’s total imports, respectively, mainly coming from Europe, the United States, and China.⁵

Additional Sustainability & Impact Highlights

• As a signatory of the UN Global Compact, the borrower is committed to aligning its operations and strategies with the Compact’s ten principles in the areas of human rights, labor, environment, and anti-corruption.
• The borrower’s product offerings include those with a special focus on increasing their client’s usage of solar energy via solar cells and high capacity batteries.
• All of the borrower’s clients comply with their local Environmental Protection Agency and the borrower provides other environmental solutions to its clients, including establishing water treatment facilities, particularly for tailing ponds, and recycling programs for oils, lubricants, and tires.
• The borrower trains local technicians and contracted staff on the wider reaches of the supply chain to give them an understanding of the whole procurement process, outside of their specific role. In cases that the borrower supplies expatriate maintenance labor, a training program is set up for local technicians to ensure that there is a knowledge transfer, so as to not displace the local work force.

¹USITC. Infrastructure Development in Sub-Saharan Africa Driving Demand for Imports of Machinery, Equipment, and Transportation Goods, 2013. ²Aggregates Business International. Rapid Rise for African Aggregate Demand, 2015. ³KPMG. Construction in Africa, 2014. ⁴CIA World Factbook. Ghana, 2016. ⁵The Observatory of Economic Complexity, Ghana, 2016.

The above information is as of the initial date of investment: August 2, 2016.

This borrower is no longer in TriLinc’s portfolio.

TriLinc originally performed an SDG mapping exercise in December 2017 to map all of our borrower companies, both current and exited from our portfolios, to specific SDGs based off of business activity. TriLinc’s official SDG alignment methodology was not finalized until June 30, 2018. For borrowers that had exited TriLinc’s portfolios prior to this time period, the selected SDGs for these borrower are a reflection of what TriLinc believes would have been the SDG alignment if 1) the SDGs had been in effect and 2) TriLinc had integrated the SDG alignment while the company was in the portfolio. The SDG mapping presented does not include input from Investment Partners or borrower companies given that the companies were no longer in the portfolio when the alignment was finalized.

RISK FACTORS
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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