AEP list­ing pro­vides ac­cess to pool of cap­i­tal

The Star Early Edition - - COMPANIES - Sandile Mchunu

BLACK em­pow­ered Pan African clean en­ergy group, African En­ergy Part­ners (AEP), de­buted on the JSE’s al­ter­na­tive ex­change (AltX) on Fri­day.

The com­pany, which in April had an­nounced its intention to list this month, said it was the first in South Africa to ex­pose in­vestors to the full spec­trum of clean en­ergy, be­yond re­new­ables only, with Liq­ue­fied Nat­u­ral Gas (LNG) at the core of its fu­ture op­er­a­tions.

AEP de­buted on the ex­change as a spe­cial pur­pose ac­qui­si­tion com­pany (Spac) on Fri­day. A Spac is a pub­licly traded buy­out com­pany that raises col­lec­tive in­vest­ment funds in the form of blind pool money, through an ini­tial pub­lic of­fer­ing, for the pur­pose of com­plet­ing an ac­qui­si­tion of an ex­ist­ing pri­vate com­pany, some­times in a spec­i­fied tar­get in­dus­try.

The com­pany’s man­age­ment raised R52 million in the pre-list­ing of­fer and se­cured sig­nif­i­cant ir­rev­o­ca­ble un­der­tak­ings from in­vestors, in­clud­ing the Pub­lic In­vest­ment Cor­po­ra­tion, to sub­scribe for ad­di­tional shares post list­ing.

The AEP board has been ac­tive prior to the list­ing and two months ago said they would em­bark on a cap­i­tal-rais­ing spree and are tar­get­ing to raise be­tween R400m and R500m to help fund its first ac­qui­si­tion.

AEP chief ex­ec­u­tive Ed­win Kikonyogo said: “Our strat­egy is to ac­quire mainly con­trol­ling stakes in tar­get op­er­a­tions as op­posed to mi­nor­ity in­vest­ment stakes, be­cause our busi­ness model is an op­er­at­ing power group rather than a fi­nan­cial in­vestor in the en­ergy sec­tor.”

It said it would tar­get en­ergy-in­ten­sive cor­po­rates and util­i­ties with en­ergy so­lu­tions that were af­ford­able, reli­able, safer, and clean.


Lever­ag­ing man­age­ment’s ex­per­tise and track record in en­ergy pro­ject de­vel­op­ment, the group would ac­quire, re­de­velop and op­er­ate a port­fo­lio of as­sets in power gen­er­a­tion, bat­tery en­ergy stor­age, power dis­tri­bu­tion and fuel logistics, driven in large part by LNG.

AEP’s ini­tial ac­qui­si­tion tar­gets are al­ready cash gen­er­at­ing and ne­go­ti­a­tions to ac­quire sev­eral as­sets are un­der way. The pro­ceeds of the pre-list­ing cap­i­tal raise will be ap­plied towards this to en­sure that a value-add, com­pli­ant vi­able ac­qui­si­tion is com­pleted in the re­quired two-year time frame.

Ex­plain­ing rea­sons be­hind the list­ing, Kikonyogo said: “List­ing on the JSE opens the op­por­tu­ni­ties to raise aware­ness of our al­ter­na­tive clean en­ergy so­lu­tions, and pro­vides ac­cess to a broader pool of cap­i­tal to fund growth.” He added that the pub­licly reg­u­lated en­vi­ron­ment is a strong driver of good gov­er­nance to the ben­e­fit of all stake­hold­ers.

Cur­rently man­age­ment holds a 47 per­cent stake in the listed com­pany.

“Our per­sonal in­vest­ment re­flects our con­fi­dence in AEP’s busi­ness model and prospects, and en­sures an in­cen­tive in tak­ing AEP along a pos­i­tive growth tra­jec­tory,” he added.

There was was no trad­ing in AEP’s shares on Fri­day.

An AEP spokesper­son said it was not un­usual for there to be no trad­ing in a Spac, be­cause there was lim­ited liq­uid­ity in the shares, with in­vestors re­main­ing in­vested un­til the Spac made a vi­able ac­qui­si­tion.


Chris Sturgess, di­rec­tor, Com­modi­ties and Key Clients at the JSE, and AEP chief ex­ec­u­tive Ed­win Kikonyogo.

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