Alternative Energy RENERGEN becomes the first SPAC from SA to list on the JSE
Johannesburg, 9 June 2015, RENERGEN Limited, a company in the fast-developing alternative energy industry, today listed on the JSE’s AltX board. RENERGEN is the first Special Purpose Acquisition Vehicle (SPAC) from South Africa to list on the exchange. The JSE established the SPAC company structure to make it possible for companies to list for the purpose of capital raising to enable the acquisition of viable assets.
RENERGEN raised around R74 million in primary capital prior to listing. The company plans to invest in alternative and renewable energy projects of up to R500 million or more such as natural gas and hydro-electricity using debt and top-up equity from shareholders as required to deliver competitive returns on capital employed.
Donna Oosthuyse, head of JSE Capital Markets comments: “Energy security is a key driver of economic development on the African continent and the alternative energy sector will have a valuable role to play in achieving this. Listing as a SPAC will enable RENERGEN to raise capital with which to acquire necessary assets, while complying with the JSE’s listing requirements which protect investors. This provides shareholders with the liquidity and transparency associated with investing in a listed entity. The SPAC structure holds great promise for the renewable energy sector as well as for other types of infrastructure development and we are hopeful that we will see this innovative structure used more often for this purpose.”
RENERGEN’s target projects will either be recently revenue generating or close to doing so in order to ensure shareholders receive optimal benefit for the investment risk. These could include opportunities in outdated infrastructure with a view to modernisation, thereby improving the overall carbon footprint and profitability of its operations.
Stefano Marani, CEO of RENERGEN says “We believe that the world is on the verge of unprecedented growth in the production and use of alternative energy sources. By increasing access to reliable, clean energy we 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 address the shortage of alternative energy required to deliver this growth.”
The Johannesburg Stock Exchange is based in South Africa where it has operated as a market place for the trading of financial products for 125 years. It connects buyers and sellers in equity, derivative and debt markets. The JSE is one of the top 20 exchanges in the world in terms of market capitalisation and is a member of the World Federation of Exchanges (WFE). The JSE offers a fully electronic, efficient, secure market with world class regulation, trading and clearing systems, settlement assurance and risk management. www.jse.co.za
A SPAC is a company consisting only of cash, which is allowed to list on the Main Board on the condition that the company buys operating assets within two years. The JSE adjusted its listing requirements to allow listings of SPACs in April 2014.
According to the JSE listing requirements, capital is held in a trust until acquisitions are made and if viable assets are not acquired, the capital is to be returned to investors. This mitigates the risk that the companies would not use their capital efficiently for shareholders. It is required that directors have a direct interest in the company. Like any other listed company, SPACs are required to file their financial statements and disclose any material event affecting the company.
H+K Strategies South Africa
Tel: +27 11 463 2198
Director: Capital Markets
Johannes van Niekerk
Tel: +27 82 921 9110