RENERGEN LIMITED - Abridged Pre-listing Statement

Release Date: 02/06/2015 10:00
Code(s): REN
Wrap Text
Abridged Pre-listing Statement

(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")


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.

    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.

    2.1  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.

    3.1  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 

    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.

    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

    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. 

    The Pre-listing Statement is available in English only, and copies may be viewed on 
    the Company's website: 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.

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

Webber Wentzel

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.

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