The International Finance Corporation (IFC) has agreed to a deal to lend Mammoth Foam Africa (MFA), the maker of Super Foam mattresses, Sh1.7 billion ($15 million) to fund expansion and other capital expenditure.
The IFC — the World Bank’s private-sector lending arm — said in disclosures on the loan that the funds would be deployed across Mammoth Foam’s three subsidiaries in Kenya (Super Foam), Uganda (Euroflex) and Malawi (Vitafoam), with the company planning to open new branches.
Super Foam has been in operation for the last 36 years, manufacturing mattresses, pillows, cushions and foam sheets in Ruiru, targeting both retail and institutional buyers.
“IFC is invited to provide a $7.5 million (Sh847.5 million) A loan and $7.5 million in B/parallel loans to MFA…to create a single consolidated group long-term loan, and to improve efficiency, expand production, and build storage capacity, among other capital expenditure investments,” said the IFC.
The loans are part of a wider $26.5 million (Sh3 billion) funding plan, which will also see the existing shareholders inject capital, with the rest drawn from the company’s working capital.
Out of these funds, $21.9 million (Sh2.47 billion) will be used to refinance and consolidate into one long-term loan a combination of short and long-term loans inherited from the consolidation process of the three subsidiaries, the IFC said.
The remaining $4.6 million (Sh519.8 million) will go towards Capex to improve efficiency, expand production, and build storage capacity, among other investments.
“The project will be financed with $15 million debt, $5.2 million (Sh587.6 million) working capital facility, and $6.3 million (Sh711.9 million) equity to be contributed on a pro-rata basis from existing shareholders,” the IFC said.
MFA is majority-owned by Catalyst Mattress Africa, which holds an 80 percent stake. Catalyst Mattress is a non-operational holding entity owned by Catalyst Fund II, a PE fund that mainly draws its funding from Development Financial Institutions, which include Britain’s CDC, the European Investment bank, IFC, Africa Development Bank and French DFI Proparco.
