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Abridged Pre-listing Statement
RENERGEN LIMITED
(formerly Dominica Trade Proprietary Limited)
Incorporated in the Republic of South Africa
(Registration number: 2014/195093/06)
Share code: REN ISIN: ZAE000202610
("RENERGEN" or "the Company")
ABRIDGED PRE-LISTING STATEMENT
This abridged Pre-listing Statement is prepared and issued in terms of the Listings
Requirements. This abridged Pre-listing Statement is not an invitation to the public
to subscribe for or to purchase Shares in RENERGEN in any jurisdiction, but is issued
in compliance with the Listings Requirements for the purpose of providing information
with regards to the Company.
This abridged Pre-listing Statement relates to the listing of RENERGEN as a SPAC on the
AltX with effect from the commencement of trade on Tuesday, 9 June 2015. This abridged
Pre-listing Statement contains the salient features of the Company and the Listing and
as such is not intended to be comprehensive. For a full appreciation of, inter alia,
the Company, its business strategy and investment policy, the Pre-listing Statement
issued by RENERGEN on Tuesday, 2 June 2015 (which is available as set out in paragraph 6
below) should be read in its entirety. Capitalised terms used in this abridged Pre-listing
Statement have the meaning ascribed to them in the full Pre-listing Statement.
In anticipation of the Listing of RENERGEN as a SPAC, by way of Introduction, the Company
raised R73 755 280 by way of a Private Placement which comprised (i) an offer to
institutional Selected Investors; and (ii) an offer to Selected Investors acting as
principal, to subscribe for a maximum number of 10 000 000 Shares at a price of R10.00
per Share.
As at the Listing Date, the total authorised share capital of RENERGEN comprises
100 000 000 Shares and the issued share capital of RENERGEN will comprise 7 375 528 Shares
with a stated capital of R73 755 280. The Directors hold, in aggregate, 370 050 Shares
in RENERGEN representing an interest of approximately 5% of the issued share capital
of the Company.
1. BACKGROUND AND INTRODUCTION
Currently, renewable energy and alternative energy sources only provide approximately
5% of the world's energy needs. Sub-Saharan Africa has approximately 620 million people
living without access to electricity and those that do have access are paying a
significant premium based on the nature of the supply.
The Directors believe that the world is on the verge of unprecedented growth in the
production and use of renewable energy and alternative energy sources, and increasing
access to reliable, modern energy can accelerate economic growth in sub-Saharan Africa
where potential energy resources are more than sufficient to meet the region's overall
needs. RENERGEN aims to position itself to profit from the current gap between Africa's
growth potential and the shortage of energy required to deliver this growth. This gap
provides unique opportunities to astute investors with the vision to unlock value where
sound projects are being hampered by lack of reliable, efficient and clean energy.
RENERGEN was formed and incorporated in Johannesburg, South Africa, on 30 September 2014
as a holding company which will participate in the growth of the African alternative
energy sector. The Company's business and investment strategies will be managed by the
Board whose members have extensive expertise and knowledge of, and experience in,
investments in the alternative energy industry. The Board intends to position the
Company to benefit from the current energy shortage in South Africa and Africa in general.
The Directors intend to pursue, in compliance with the Listings Requirements pertaining
to a SPAC, a strategy of investing in Viable Assets in relation to the alternative energy
industry, thereby aligning the interests of potential vendors of Viable Assets and
investors. The Board believes that the Company is well placed to compete for and
complete the acquisition of Viable Assets, given its Directors' knowledge, experience
and reputation, and their ability to structure acquisitions efficiently for both the
Company and the potential vendors of Viable Assets.
While RENERGEN is currently considering a number of acquisitions, no formal binding
agreements have been entered into, in accordance with the Listings Requirements
pertaining to a SPAC.
The intention of RENERGEN is to maximise returns to Shareholders by focusing on
pursuing viable alternative energy business opportunities.
2. INVESTMENT POLICY AND STRATEGY AND ACQUISITION CRITERIA
2.1 Investment Policy
RENERGEN is an alternative energy company focused on acquiring and developing
Viable Assets in South Africa and sub-Saharan Africa. The Board aims to target
projects that are either recently revenue generating, or close to doing so,
to ensure Shareholders receive maximum benefit for the investment risk.
Eligible targets will be assessed with regards to the following three key
investment criteria:
2.1.1 macro-economic factors affecting the business;
2.1.2 business case and growth potential; and
2.1.3 financial and legal due diligence.
In addition, the Board will seek investments in businesses with either a strong
and experienced management team or, alternatively, where the underlying business
opportunity, technology and/or asset profile can be leveraged by the Board to create
and unlock value and maximise profits from the investment.
Investment opportunities must either be in the alternative energy sector, which
includes renewable energy, or may be investments into outdated infrastructure with
a view to modernisation, thereby improving the overall carbon footprint and
profitability of the operation.
RENERGEN will look at an investment with a market value that is less than its
intrinsic value or which, as a result of RENERGEN's management introducing expertise,
influence and business relationships, is anticipated to improve significantly. RENERGEN
will also consider dividend yield, growth in sales, balance sheet, management team
capabilities, earnings and cash flow, to the extent applicable.
Once a target has been assessed and found to be a Viable Asset, RENERGEN's management
will prepare an internal review of that Viable Asset which will be presented to
management for consideration and approval in an ad hoc investment committee meeting.
If approved, an offer will be presented to the Target Acquisition's management. If the
offer is accepted, the acquisition of any Viable Assets will be implemented within the
shortest possible timeframe, subject to the approval of a majority of disinterested
Directors and the approval of a majority of Shareholders, in accordance with the
Listings Requirements.
RENERGEN will focus on sub-Saharan Africa, including South Africa, but may consider
acquisitions in developing markets outside of this geographical region, which may
expose RENERGEN to foreign exchange rate risk.
2.2 Investment Policy Restrictions
RENERGEN's investment policy restrictions are as follows:
- primary focus on sub-Saharan Africa, with a secondary focus on other emerging markets;
- no offshore exploration investments until at least one onshore acquisition has been
made; and
- no investments deemed by the Board to be environmentally harmful.
2.3 Acquisition Criteria for Viable Assets
Viable Assets, which will be managed by the Company following their acquisition,
may include equity and quasi-equity instruments in projects and/or businesses whose
purpose is to trade, extract and/or refine energy, and in respect of which the Board
has identified an opportunity to enhance the efficiency of delivery or conversion of
energy in order to improve profitability, thereby maximising Shareholder return.
Viable Assets will be selected by the Board on the basis that, in conjunction with
the investment policy and investment policy restrictions set out in paragraphs 2.1
and 2.2 above, the following criteria are met:
- the assets are, or in the near future will be, cash generative;
- the assets satisfy the investment policy alternative energy classification criteria,
or an associated investment into logistics;
- the assets are geographically located in an emerging market territory; and
- investment in the Viable Assets will not be dilutive to the Company's earnings,
unless such investment is of a strategic nature and is anticipated to enhance the
overall value of the Company.
The acquisition criteria may not be changed by the Board unless a resolution is
passed at a meeting of Shareholders by achieving a 75% majority of the votes cast
to that effect, in accordance with the Listings Requirements.
3. RATIONALE FOR LISTING
3.1 Capital Structure
Critical to RENERGEN's business model is the optimisation of its capital structure
to enhance returns for investors. The Board considers the Company's main competitors
to be private equity funds, which have mandates to return capital to investors within
a defined timeline. A listing on a well-regulated exchange eliminates the fixed deadline
and rather incentivises management to focus on the true value of an investment; and the
ability to generate long-term cash flow. Investing and divesting should be driven by
maximisation of profitability to the Company and not by when a predetermined mandate
specifies a divestment should occur.
3.2 Shares as currency
Listed paper, which behaves much like currency for the issuer, allows the Company,
amongst other things, to utilise its own stock as consideration for an acquisition.
Where an investment into an asset is possible at a price to earnings ratio which is
favourable to that of the acquiror, use of the Company's listed Shares becomes a
cost-effective means of investment and therefore has the potential to enhance investor
returns.
3.3 Profile
By illustrating the level of credibility, transparency, corporate governance and
trust associated with a JSE-listed company, the Board believes that the Company will
be in an advantageous position to develop its brand and the brands associated with its
future acquired Viable Assets. Furthermore, the Directors believe that the Company's
enhanced profile will assist in attracting strong, experienced management teams of
Target Acquisitions to the RENERGEN group.
4. DIRECTORS
The full names, ages, designations, qualifications and addresses of the Directors are
as follows:
Name: Stefano Marani (37)
Designation: Chief Executive Officer
Qualifications: B.Sc Actuarial Science, B.Sc Hons in Advanced Mathematics of Finance
Address: 3 Melrose Boulevard, Melrose Arch, Johannesburg, 2076
Name: Clive Angel (43)
Designation: Chief Financial Officer
Qualifications: BCom, BAcc, CA (SA) WITS
Address: 3 Melrose Boulevard, Melrose Arch, Johannesburg, 2076
Name: Russell Andrew Broadhead (53)
Designation: Independent Non-executive Director
Qualifications: GCE O Levels, Ordinary National Diploma in Construction Management,
Higher National Diploma in Building Studies, Senior Management Development
Programme, Professional Construction Project Manager, Contract Law and
Insurance, NEC Conditions and NEC The Adjudication Process
Address: 3 Melrose Boulevard, Melrose Arch, Johannesburg, 2076
Name: Reginald Edmond Cooke (41)
Designation: Independent Non-executive Director
Qualifications: Mechanical Engineering National Diploma, International Training on Liquid
Petroleum Gas and Compressed Natural Gas in the USA, Brazil, Argentina
and Italy
Memberships: Director of Southern African Gas Association; Vice Chairman of
Southern African Biogas Industry Association; SABS/SANS Standard Convener;
SAQCC Registered Practitioner
Address: 3 Melrose Boulevard, Melrose Arch, Johannesburg, 2076
Name: Mbali Swana (58)
Designation: Independent Non-executive Chairman
Qualifications: BAS (UCT), BArch (UCT), Pr Arch (SA), MIAT (SA)
Address: 3 Melrose Boulevard, Melrose Arch, Johannesburg, 2076
5. LISTING ON THE JSE
The JSE has granted RENERGEN a Listing in respect of 7 375 528 ordinary shares on AltX
under the abbreviated name "RENERGEN", share code "REN" and ISIN ZAE000202610,
with effect from the commencement of business on Tuesday, 9 June 2015.
6. COPIES OF PRE-LISTING STATEMENT
The Pre-listing Statement is available in English only, and copies may be viewed on
the Company's website: www.renergen.co.za or during normal business hours from
2 June 2015 until 9 June 2015, at the addresses set out below:
- RENERGEN, 21 7th Avenue, Parktown North, 2193; or
- Merchantec Capital, 2nd Floor, North Block, Hyde Park Office Tower, corner 6th Road
and Jan Smuts Ave, Hyde Park, Johannesburg, 2196.
Johannesburg
2 June 2015
Joint Corporate Adviser and Designated Adviser:
Merchantec Capital
Joint Corporate Adviser and Joint Lead Arranger:
Integrated Capital Management
Joint Lead Arranger:
Trillian Asset Management
Attorneys:
Webber Wentzel
DISCLAIMER
This abridged Pre-listing Statement does not constitute an offer to the public for the sale
of or subscription for, or the solicitation of an offer to buy and/or subscribe for, shares
as defined in the South African Companies Act, No. 71 of 2008 (as amended) or otherwise
(the "Companies Act") and will not be distributed to any person in South Africa in any manner
which could be construed as an offer to the public in terms of the Companies Act. This abridged
Pre-listing Statement does not constitute a prospectus registered and/or issued in terms of the
Companies Act.
This abridged Pre-listing Statement includes statements about RENERGEN that are, or may be deemed
to be forward-looking statements. All statements other than statements of historical fact are,
or may be deemed to be, forward-looking statements. These forward-looking statements are not
based on historical facts, but rather reflect current expectations concerning future results and
events and generally may be identified by the use of forward-looking words such as "targets",
"believe", "aim", "expect", "project", "anticipate", "intend", "foresee", "forecast", "likely",
"should", "planned", "may", "will", "estimated", "potential" or similar words and phrases.
Examples of forward-looking statements include statements regarding a future financial position
or future profits, cash flows, corporate strategy, estimates of capital expenditures, acquisition
strategy, or future capital expenditure levels, and other economic factors, such as, amongst other
things, interest and exchange rates and public sector spend and resource allocation.
By their nature, forward-looking statements involve known and unknown uncertainties, assumptions
and other important factors, because they relate to events and depend on circumstances that may
or may not occur in the future, whether or not outside of the control of RENERGEN. Such factors
may cause RENERGEN's actual results, financial and operating conditions, liquidity and the
developments within the industry in which RENERGEN intends to operate to differ materially from
those made in, or suggested by, the forward-looking statements contained in this abridged
Pre-listing Statement. RENERGEN cautions that forward-looking statements are not guarantees of
future performance.
All these forward-looking statements are based on estimates and assumptions made by RENERGEN,
all of which estimates and assumptions, although RENERGEN believes them to be reasonable, are
inherently uncertain. Accordingly, no assurance can be given that any such forward-looking
statements will prove to have been correct. Any forward-looking statement made in this abridged
Pre-listing Statement or elsewhere is applicable only at the date on which such forward-looking
statement is made. New factors that could cause the business of RENERGEN not to develop as
expected may emerge from time to time and it is not possible to predict all of them. Further, the
extent to which any factor or combination of factors may cause actual results to differ materially
from those contained in any forward-looking statement is not known. RENERGEN has no duty to, and
does not intend to, update or revise the forward-looking statements contained in this abridged
Pre-listing Statement after the date of this abridged Pre-listing Statement, except as may be
required by law or regulation.
Date: 02/06/2015 10:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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