Nigerian mobility startup, Metro Africa Xpress (MAX) has successfully raised N400 million through a one-year fixed rate series 1 bond, blazing the trails as the first mobility company in Africa to issue a bond.
The N400 million series 1 bond was issued under the newly structured N10 billion or $22 million private company bond programme.
Despite the challenging global economic backdrop, the bond, distributed through a private placement, received strong interest from highly reputable local and international fixed income investors that are seeking exposure to a high-quality issuer like MAX.
MAX Chief Executive Officer and co-founder, Mr Adetayo Bamiduro, said MAX’s bond programmed was structured in line with its mission to build the technology and financing infrastructure for mobility across Africa. Proceeds from the bond shall be used to fund MAX’s growing asset financing program across two-wheeler, three-wheeler and other vehicle classes in Nigeria and beyond, as MAX continues to institutionalize driver financing across the continent.
According to him, the transaction and the bond programme were both arranged by DLM Advisory (DLM), a Nigeria-based, regulated full-service developmental investment bank that combines advisory, origination, underwriting and distribution capabilities.
“MAX is extremely pleased with the successful Bond issuance, which reflects the market confidence in MAX’s mission, strategy and execution capabilities. This is further evidence that MAX remains at the forefront of technology, financial and business model innovation to solve a fundamental aspect of Africans’ lives,” Bamiduro said.
Chief Growth Officer and Co-Founder, MAX.ng, Mr. Chinedu Azodoh said the fully integrated and innovative nature of MAX’s driver-vehicle-collection technology stack was essential to demonstrating our ability to scale and manage an ever-growing pool of financed drivers across 6 cities with unmatched efficiency, speed, and agility.
He said the funding was delivered on the basis of those proprietary technology capabilities that enable heightened levels of portfolio scrutiny and monitoring, which were fundamental to successfully closing this trailblazing transaction.
Group Chief Executive Officer, DLM Capital Group, Mr Sonnie Ayere said DLM has built a successful track record of structuring, participating in and delivering bespoke and innovative capital raising solutions to sovereign entities as well as public and private organizations.
“This is a bold step in advancing DLM’s developmental driven mandate by providing innovative solutions to meet the funding needs of players in key sectors of the economy, through the capital markets. MAX has positioned itself at the forefront of its industry with its unique business model that deploys technology to cater to the peculiarity of mobility within Nigeria’s major cities,” Ayere said.
He added that MAX’s funding programme has played positively in the aspect of employment creation as the average cost of the vehicles financed, the capital unlocked through the series 1 bond will lead to the creation of close to 1,400 additional jobs, which in turn has a positive multiplier effect on the Nigerian economy.
“As a developmental Investment Bank committed to creating direct impacts to the lives of people, we have put our money where our mouth is and have taken a credit decision to support their inaugural issuance, due to its strong credit fundamentals and the social and economic impact it brings. We are delighted to have assisted MAX on this significant stride,” Ayere said.
Chief Financial Officer, MAX.ng, Mr Guy-Bertrand Njoya, said the most exciting for the company about the ground-breaking funding structure was being able to close it amidst the current social and economic uncertainty.
“We are deeply honored by the confidence shown by the investment community in our ability to continue leveraging access to wholesale finance as well as other internal capabilities – including proprietary technology solutions, exclusive vehicle manufacturer deals, low-cost credit, discounted insurance and other financial services – to serve the growing group of overlooked, underserved, unbanked or underbanked Africans like it has never been done before,” Njoya said.
Head, DLM Advisory, Mr Emeka Ngene, noted that the bond issuance was in keeping with the vision of the DLM brand, which is committed to increasingly deepen the penetration of the domestic capital markets with every new project it undertakes.
According to him, delivering the bond issuance for MAX further helps in driving the group’s concept as DLM believes that local currency funding is the way to go for businesses like MAX with significant impact potential.
“Our hope now is that the success of this deal further paves the way for more collaboration towards providing similar solutions for other businesses with clear development objectives,” Ngene said
