Zephyr Management, L'P' Private Equity for Pan African Businesses Celtel One Success Story

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Zephyr Management, L.P.Private Equity for Pan
African BusinessesCeltel One Success Story

• 23 June 2005

Thomas C. Barry Chief Executive Officer
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• Zephyr Management has sponsored sixteen
  specialized investment funds with 1 billion in
  capital (website www.zephyrmanagement.com)
• USA distressed municipal debt
• Mexico private equity
• Korea private equity
• Marketable securities funds investing in
• All developing countries
• Latin America
• Japan
• High income equity securities

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• Zephyrs Private Equity Funds in Africa

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What Is Private Equity / Venture Capital?

• Private Equity
• Making equity (or equity-like) investments in
  (usually) privately owned businesses
• Private Equity often used as an umbrella term
  for different stages/types of equity investments
  in businesses e.g., venture capital, expansion
  funding, MBO/LBO, etc.
• Venture Capital (subset of Private Equity)
• Funding of start-up businesses of small, early
  stage, businesses with very high growth potential
• Private Equity Funds typical
• Ten-year life
• Holding period of 3-7 years before exiting

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Private Equity in Africa

• South Africa
• Over 40 fund managers and over US6 billion of
  capital under management
• Rest of Africa
• Small, but increasing number of fund managers
  gtUS2 billion of capital under management
  (however, no reliable statistics available)
• Economies generally small transaction
  opportunities often cross-border in nature
• Development Finance Institutions (DFIs) (e.g.,
  IFC, DBSA, Dutch FMO, DEG, Proparco, CDC)
  important investors
• Explosive growth opportunities in some sectors
  e.g., cellular communications

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• Celtel
• An African Success Story

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Celtel Summary

• Celtel was formed and built by African people and
  raised over 400m equity to invest over 800m in
  bringing communications to more than 6 million
  Africans
• Celtel has been acquired by MTC Kuwait for 3.4
  billion in one of the biggest corporate deals
  ever involving a company operating in Sub-Saharan
  Africa
• This deal brings Gulf oil money to Africa and
  puts over 2 billion back to the Development and
  private equity funds who were major Celtel
  shareholders

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Celtel Growth and Transformation

• From licence hunting entrepreneurial team to a 1
  billion revenue company ready for IPO in 7 years

• Award of licences in Zambia, Republic of the
  Congo, Sierra Leone
• Sale of Indian interest
• Vodafone Egypt founding shareholder

• Award of licences in Malawi, Gabon, Tchad and
  DRC

• Award of licences in Burkina Faso and Niger
• Increase of stake in Uganda

• Acquisition of 35 stake and management control
  of TTCL, Tanzanian fixed-line operator followed
  by launch of mobile operations
• Acquisition of 39 of Mobitel, the first mobile
  operator in Sudan

• Acquisition of Link Africa

• IPO preparation
• Relaunched brand
• MSICIH renamed Celtel International
• Acquisition of 60 of Kencell, Kenya

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1999
2000
2001
2002
2003
2004
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Celtel Today Market Leader in 10 of 13 Markets
BurkinaFaso
250m Population Under Licence (a)
Niger
US748m 2004PF (c) Proportionate Revenue
Chad
Sudan
6m Managed Mobile Customers
Uganda
Sierra Leone
Kenya
Gabon
DRC
US264m 2004PF(c) Proportionate EBITDA
Tanzania
Republic of the Congo
Zambia
4m Proportionate Mobile Customers
Malawi

• As of end of 2003 (World Bank)
• As of end of 2004
• 2004 Pro-Forma for the acquisition of Kencell

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World Class Supportive Shareholders
Key Shareholders

• Company has gained trust of world-class investors
  including significant stakes owned by
• Africa-focused investment funds
• Major development finance institutions
• Leading commercial private equity groups

Founder, Management and Employees
African Investors WordTel Africa, Zephyr
Management Standard Bank
AIG Infrastructure Fund, IFC
Intl Emerging Mkts Invt Funds Actis / CDC, DEG,
FMO
Private equity Bessemer, Alba, Citigroup,
Capital International etc.
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Celtel Achievements

• 13 mobile operations
• Largest footprint of any operator across Africa
• Over 250 million people in licensed countries
  (30 of all Africans)
• Over 6 million customers
• Revenue run rate of over 1 billion a year
• Ebitda 250m in 2004 target 400m in 2005
• Half the top management and over 98 of staff are
  Africans
• Created Celtel as a major new brand built on the
  positive side of African culture

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Zephyr Managements Role in Celtel

• Invested 24 million from two different Zephyr
  Funds. Acquisition proceeds from MTC Kuwait
  totaled 142 million
• Board of Directors, Chair of Compensation
  Committee
• Active in helping secure increased capital in
  successive rounds
• Governance role in considering IPO versus sale of
  Company
• Africa provides opportunities for investments in
  high growth fields. Celtel meets global
  standards of transparency, governance and lack of
  corruption

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