African Energy Partners gets green light for AltX listing
Black empowerment group African Energy Partners is scheduled to list on the JSE’s AltX this year.
The group is going to list as a special purpose acquisition company, which will enable it to generate the R500 million in capital it needs for several acquisitions in the energy sector so that it can focus on its liquefied natural gas niche market.
A special-purpose acquisition company is established to facilitate the primary capital raising process that will enable the acquisition of assets.
The company, headed by energy specialist Edwin Kikonyogo as its CEO and Nkosi Gugushe as its chief operating officer, this week announced that it would be listing on the AltX on June 1.
The JSE issued the company with official approval this week.
“Our strategy is to acquire mostly controlling stakes in target operations as opposed to minority investment stakes,” Kikonyogo said.
He added that African Energy Partners already had a number of acquisition targets that were generating cash or were less than 12 months from doing so.
“Our target operations offer a mix of medium- and long-term off-take agreements, as well as a contracted cost base, which makes for good long-term earnings visibility. As our mandate is Pan-African, as opposed to South African, we will also enjoy a mix of rand and hard currency earnings.”
Kikonyogo said the company opted to debut on the stock exchange now because the continent was ready for a black-managed group that would make cheaper, cleaner and more reliable power.
According to Gugushe, the company wanted to make several viable asset acquisitions within the next 12 months.
“We want to take the R500 million and turn it into several billion, even R10 billion, and we don’t just want the big investors that are going to buy R200 million – we also want the ordinary man on the street because the shares will only be R10 each,” Gugushe said.
As a special-purpose acquisition company, African Energy Partners will have two years to make a viable acquisition, and its founding directors will contribute at least 5% of the capital themselves.
On conclusion of the acquisitions, subject to JSE requirements, the company will consider a move to the JSE’s main board.
Kikonyogo said African Energy Partners is a new company, despite being managed by Destiny Corporation, which has been in the energy sector for 12 years.
Destiny Corporation is also owned by Kikonyogo and Gugushe.