Memorandum Re Launching Product - PDF by ojn14826

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									                                                          SHELTER AFRIQUE

                                 THE COMPANY FOR HABITAT AND HOUSING IN AFRICA
                           SOCIETE POUR L`HABITAT ET LE LOGEMENT TERRITORIAL EN AFRIQUE




       Recruitment of a Consulting Firm to Prepare a Private
       Placement Memorandum on Private Equity Fund for
       Housing and Real Estate Investments in Africa.

           Terms of Reference for a Short-Term Consultancy


                                       Table of Contents



 1.0    PROJECT INFORMATION ---------------------------------------------------------------            2
 2.0    OBJECTIVE ----------------------------------------------------------------------------------   2
 3.0    BACKGROUND ----------------------------------------------------------------------------        3
 4.0    SCOPE OF WORK -------------------------------------------------------------------------        3
 5.0    METHODOLOGY ----------------------------------------------------------------------------       4
 6.0    PROJECT SCHEDULE AND MILESTONES ----------------------------------------                       4
 7.0    GOVERNANCE -----------------------------------------------------------------------------       5
 8.0    PAYMENTS ----------------------------------------------------------------------------------    5
 9.0    CONTENT OF THE BID ------------------------------------------------------------------          5
10.0    PREPARATION OF TECHNICAL PROPOSAL-------------------------------------                         6
11.0    PREPARATION OF FINANCIAL PROPOSAL--------------------------------------                        6
12.0    SUBMISSION---------------------------------------------------------------------------------    7
13.0    SELECTION CRITERIA AND EVALUATION------------------------------------------                    7




                                           January, 2010
1.0     PROJECT INFORMATION


 Project Title                    Private Placement Memorandum on Private Equity for
                                  Housing and Real Estate Investments
 Project Manager                  Osita Okonkwo
                                  Deputy Managing Director
 Project Sponsor                  Mr. Alassane Ba
                                  Managing Director
 Project Start Date               February, 2010
 Project End Date                 August, 2010
 Organization                     SHELTER AFRIQUE
                                  Longonot Road Upper Hill Nairobi
                                  Telephone: +254202722305 to 309        Fax:+254202722024
 Country                          KENYA
 Contact                          Osita Okonkwo
                                  Email: ositadinma@shelterafrique.org



2.0     OBJECTIVE

In its current Strategy Plan, Shelter-Afrique envisages broadening its investment scope by
identifying opportunities to increase development impacts, improve efficiency and
effectiveness of its operations. As a result, Shelter-Afrique together with other partners,
intends to raise equity funds through private placement for middle income housing and real
estate projects in Africa. The objective of the consultancy therefore is to determine the
viability and structure of the fund and to prepare a Private Placement Memorandum (PPM)
for launching and raising funds from potential investors.

Through the PEF, Shelter-Afrique intends to raise approximately US$ 60 million from the
following categories of investors:
     • Development Financial Institutions (ADB, AFD, OFID, FMO, Proparco, DBSA, IFC);
     • Insurance and Reinsurance companies: (Africa Re, East Africa-Re, Zep Re,)
     • Commercial Banks: Bank of Africa, Ecobank, UBA,
     • Private Equity Funds: (Business Partners International Ltd, Grofin East Africa,
        Acumen Fund, Old Mutual).

Assistance is being requested to:
  • Conceive and develop the unique characteristics of the fund in terms of its products,
    investment strategies and management, returns, exit strategies amongst others;
  • Develop strategies for marketing and placing the funds;
  • Identify partners with whom to work with to develop and market the fund;
  • Identify potential investors to the fund;
  • Prepare a Private Placement Memorandum to raise equity funds for housing and real
    estate projects in Africa;

This document therefore outlines the Terms of Reference (TOR) for the acquisition of the
services of an external consultant to assist executing the above broad assignments amongst
others.




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3.0      BACKGROUND

Shelter-Afrique is a pan African housing finance and development institution established by
African governments to address the need for sustainable housing delivery system and
related infrastructure projects in Africa. Shareholders include 42 African countries, the
African Development Bank, and the African Re-Insurance Corporation. Shelter-Afrique’s
mandate is to provide financing by way of debt, quasi-equity and equity to both public and
private institutions for housing and urban infrastructure projects in its member countries. The
company commenced active operational activities in 1986 and has since then funded a
number of small and medium sized projects with loan amounts averaging about US$1.4
million per project in over 25 of its member countries. More information can be obtained from
the website: www.shelterafrrique.org

In June 2007, the Board of Directors of Shelter-Afrique approved a new Strategic Plan for
the Company which puts emphasis on product diversification as key strategies for improving
investments in Shelter-Afrique and in Africa’s Housing Sector. Equity investments, Joint
Ventures and private equity funds were identified as key areas to be explored. A clearer
linkage between objectives and strategies has been articulated as well as the principles and
procedures for the Company's equity participation operations. Opportunities for this kind of
investment have opened up significantly in member countries, many having recently
embarked upon far reaching policy and institutional reforms, an integral aspect of which
includes the liberalization of their financial sectors and investment regulations.

Investment in private equity will help Shelter-Afrique:

             •   Strengthen company’s operations and mobilise other financial institutions
                 involvement in housing development in Africa;
             •   Diversify its products and offer different classes of investors the opportunity to
                 participate in Africa’s growing housing sector;
             •   Mobilise resources for housing sector development in line with the Strategic
                 Plan;
             •   Improve returns on shareholder’s funds.

4.0      SCOPE OF WORK

In order to achieve the main objectives of this assignment, the consultant will carry out the
following tasks:

      1. Conduct a desk based literature assessment of the enabling environment for private
         equity funds in Africa including an analysis of various governing regulations;
      2. Analyse the structure and performance of similar private equity funds in Africa and
         highlight lessons learnt or that need to be kept in view in structuring the proposed
         fund;
      3. Review and analyse Africa’s middle income housing market and develop the demand
         profile for them in key markets;
      4. Help in identifying and developing/building a pipeline of projects for consideration;
      5. Determine investors’ appetite for PEFs for middle income housing and the volume of
         resources Shelter-Afrique could possibly raise;
      6. Design and develop the structure of the fund including capitalisation, management,
         investment strategies, returns and associated costs, exit mechanism, amongst
         others;
      7. Advise on the level of investments Shelter-Afrique would commit to the PEF to
         optimise returns and attract others;



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      8. Conduct an operational review of Shelter-Afrique to determine the adequacy of its
          organisation structure and business processes to originate and manage a private
          equity fund;
      9. Determine any additional changes in the investment and approval processes in
          Shelter-Afrique that would facilitate the business of the Fund;
      10. Determine and propose additional human and financial resources that would be
          required to ensure the smooth and viable launching and operations of the fund;
      11. Review the statutes, laws setting up Shelter-Afrique and its Headquarters agreement
          and advise on the appropriate legal structure of the PEF to ensure tax efficiency and
          bankruptcy protection both for Shelter-Afrique and investors;
      12. Working with Shelter-Afrique staff, prepare a proforma balance sheet, profit and loss
          account and cashflow projections for the Fund;
      13. Propose other service providers; accountants, custodians, advisers, lawyers, that
          would work with Shelter-Afrique to ensure the that the fund performs as planned;
      14. Prepare PPM for issuing and placing the PEF amongst potential investors
      15. Oversee and finalise the issue of an engagement letter, investment bank term sheet,
          due diligence checklist, a private placement memorandum and the subscription
          agreement.

5.0      METHODOLOGY

The consultant will work from their premises as well as in Shelter-Afrique offices during the
contract implementation period and will employ an acceptable methodology and work plan in
carrying out the assignment including but not limited to the following:

             •   Elaboration of the TOR;
             •   Oversee circulation of draft PPM for review;
             •   Utilise tools for implementation and review procedures within stated
                 timelines;
             •   Training and transfer of skills;
             •   Work closely with Shelter-Afrique units responsible for these activities.

The consultants may further elaborate and/or supplement the TORs and the scope of work
so as to ensure the achievement of the main objectives of the project.

6.0      PROJECT SCHEDULE AND MILESTONES

The duration of the consulting services will be about four months. During the project
implementation period, the consultant will spend significant time working side by side with
Shelter-Afrique staff. The consultant shall also submit regular progress reports to Shelter-
Afrique. This will be undertaken in the following stages:

April/May:       About four weeks work on review of Shelter-Afrique activities and its portfolio,
                 operation review of PEFs in Africa and preparing of interim report;

June:            Four weeks to encompass detailed review and report preparations,
                 discussions with stakeholders and consultations with management on
                 emerging issues;

July:            Another four weeks for finalizing the report and handing over the final PPM to
                 Shelter-Afrique;

Sept - Dec:      Once the report and PPM are finalized, the management team will be
                 responsible for soliciting and pitching potential new investors.



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7.0      GOVERNANCE

      1. Selected Consultants will report to Osita Okonkwo, Deputy Managing Director, who
         will work in consultation with the Managing Director. A Project Committee will be
         established to oversee supervision and monitoring of the assignment.

      2. Role of the Project Committee:

             •   Ensure that the outputs and deliverables are consistent with the overall
                 objectives of the assignment;
             •   Ensure the appropriate reviews of issues encountered during the lifespan of
                 the assignment;
             •   Verify that the required approvals and directions for the assignment are
                 obtained at every stage of the assignment;
             •   Approve the interim and final reports and recommendations submitted by the
                 consultant.

      3. The project committee will comprise: Managing Director, Deputy Managing Director,
         Team Leader, Business Development, Team Leader, Risk Management and
         Compliance, Director of Finance, Assistant Investment Officer (Special Products)
         and the Consultant(s).

      4. The final report and PPM will be approved by Shelter-Afrique`s Board of Directors.
         The management will thereafter embark on soliciting investors.


8.0      PAYMENTS

In line with the requirements of the consultancy practice, payment for consultancy services
will be as agreed and negotiated and this will be an open bidding/tender driven process.
The consultant must undertake to deliver their services in this assignment to the expected
levels of proficiency.


9.0      CONTENT OF THE BID

Consultants, who will be professional firms, must have extensive experience in structuring
PEFs and preparation of PPM especially for private equity funds. The consultants must also
provide all the supporting information/documents as proof of their expertise in the area
under consideration. The bid must contain the following parts:

      1. Administrative information including:

             •   Name of applicant, full address, telephone and fax numbers and e-mail
                 address;
             •   Legal status;
             •   Identification of the headquarter or domicile;
             •   Date of establishment or registration;
             •   Details of the organization structure;

      2. Technical content of the bid including:

             •   Detailed CV of the proposed consultant, an explanation of the nature and
                 extent of their availability and participation in the project;



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          •   Description of relevant professional experience with emphasis on experience
              in preparation of PPM on equity participation;
          •   Description of the consultant’s work programme, methodology and
              organization to be set to implement the project.

   3. Financial proposal including:

          •   Full details of the proposed price for the project stated in US Dollar (US$).
              This should be in a separate sealed envelope and in the format provided.

10.0   PREPARATION OF TECHNICAL PROPOSAL:

       The consultant’s proposal shall be written in English Language. In preparing the
       Technical proposal, consultants are expected to examine the requirements contained
       herein. Material deficiencies in providing information requested may result in rejection
       of proposal.

       The Technical Proposal shall provide the following information in the prescribed
       format:
           i.  A brief description of the firm’s organisational structure and an outline of
               recent experience on assignments of similar nature. For each assignment the
               outline should indicate inter alia, the profiles of the staff proposed, duration of
               assignment, contract amount and firm’s involvement;
          ii.  Any comments or suggestions on the Terms of Reference, a list of services
               and facilities to be provided by the client;
         iii.  A description of the methodology and work plan for performing the
               assignment;
         iv.   The list of proposed staff by specialty, the tasks to be assigned to each staff
               member and their timing;
          v.   CVs recently signed by the proposed professional staff and the authorised
               representatives submitting the proposal. Key information should include
               number of years working for the firm/entity and degree of responsibility held in
               various assignments during the last ten years;
         vi.   Estimates of the total staff input (professional and support staff staff-time)
               needed to carry out the assignment supported by bar chart diagrams showing
               the time proposed for each professional team member;
        vii.   A detailed description of the proposed methodology, staffing and monitoring
               training;
        viii.  Any other additional information.

       The technical proposal shall not include any financial information.

11.0   PREPARATION OF FINANCIAL PROPOSAL

       In preparing Financial Proposal, consultants are expected to consider the
       requirement and conditions contained herein. It lists all costs associated with the
       assignment including; staff remuneration and reimbursable expenses (such as
       subsistence, transport, e.t.c.) services and equipment, printing, training etc. If
       appropriate, these should be broken down by activity.
       The Financial Proposal should clearly indicate as a separate amount, taxes, duties
       fee, levies and other charges imposed under the law on consultants, sub-consultants
       and their personnel. Consultants shall express the price of their services in US$.

       The proposal must remain valid for 90 days after submission date. During this period,
       the consultant is expected to keep available, at his own expense, the professional


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       staff proposed for the assignment. Shelter-Afrique will make best effort to complete
       negotiations within this period.

12.0   SUBMISSION

       The original proposal (Technical Proposal and Financial Proposal) shall be prepared
       in indelible ink. It shall contain no interlineations or overwriting, except as necessary
       to correct errors made by the firm itself. Any such corrections must be initialled by the
       person(s) authorised to sign the proposals.

       The original of the Technical Proposal shall be placed in a sealed envelope and
       clearly marked ‘Technical Proposal’ and the original of the Financial Proposal in a
       sealed envelope and clearly marked ‘Financial Proposal’ and a warning: “Do not
       open with Technical Proposal.”

       The completed Technical and Financial proposals must be delivered at the
       submission address on or before 15/03/2010. Any proposal received after closing
       date for submission of proposals shall be returned to the respective consultant
       unopened. After the deadline for submission of proposals, the technical proposal
       shall be opened immediately by the opening committee.

       Completed proposals, clearly marked Technical Proposal and Financial proposal
       should be addressed to:

       The Managing Director,
       Shelter-Afrique,
       Shelter-Afrique Centre, Longonot Road,
       P.O. Box 43579 00100.
       Nairobi.

13.0   SELECTION CRITERIA AND EVALUATION

       The contract will be awarded to the tenderer whose offer represents the best value
       taking account of the professional and technical capacity, the quality of offer and the
       price.

       Evaluation of Technical Proposal:
       The evaluation committee shall evaluate proposals on the basis of their
       responsiveness to Terms of Reference, applying the evaluation criteria as follows:

       Criteria:                                                            Score (%)

   1. Professional and technical capacity                                        60
      The selected consultant should have:
         • Significant experience in the preparation of Private placement memorandums
             especially for private equity funds and venture capitalist in real estate
             development;
         • Track record of performing the tasks involved in issuance of Information
             memorandum and other related activities. Shelter-Afrique will assess this
             criterion based on a list of previous activities undertaken in this field by the
             consultant;
         • Qualifications and experience of key personnel including the lead consultant
             and other specialists.




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2. Quality of the offer                                                40
     • Technical approach and methodology, work plan, organisation and staffing;
     • Quality and understanding of the nature of the assignment, its context and
          desired results;
     • Feasible work program with regard to the identification and distribution of
          tasks;
     • Responsiveness to Terms of Reference.

   Each response will be given a Technical score (St). A proposal shall be rejected at
   this stage if it does not respond to important aspects of the Terms of Reference or if
   it fails to achieve the minimum technical score of 80%.

   Evaluation of the Financial Proposal
   After Technical Proposal evaluation, Shelter-Afrique shall notify those consultants
   whose proposals didn’t meet the minimum qualifying mark or were considered non
   responsive to the requirements or the TOR indicating that their financial proposals
   will be returned after completing the selection process. Shelter-Afrique shall
   simultaneously notify consultants who have secured the minimum qualifying mark
   and indicate the date for opening the Financial Proposals.

   The evaluation committee will determine whether the financial proposals are
   complete (i.e. whether consultants have costed all the items of the corresponding
   Technical Proposal and correct any computational errors. The cost of any unpriced
   item shall be assumed to be included in other costs in the proposal. In all cases, the
   total price of the Financial Proposal as submitted shall prevail.

   The formula for determining the Financial Score (Sf) shall, unless an alternative
   formula is indicated, be as follows: Sf = 100 x FM/F, where Sf is the financial score,
   Fm is the lowest priced financial proposal and F is the price of the proposal under
   consideration.

   Proposals will be ranked according to their combined technical (St) and financial (Sf)
   scores using the weights: (T=the weight given to Technical Proposal, 80%, and
   P=the weight given to the Financial Proposal; T+P=1). The combined technical and
   financial score, S, is calculated as follows: S=St x T% + Sf x P%. The firm achieving
   the highest combined technical and financial score will be invited for negotiations.



   ........................................

   Deputy Managing Director,
   SHELTER-AFRIQUE.




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