Invictus raises US$10m from Mutapa Fund and Mangwana Capital, sets VFEX share listing

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Invictus Energy has secured the backing of investor Mangwana Capital and the Mutapa Investment Fund to raise US$10 million to develop its gas find in Muzarabani.

NSSA and the Public Service Commission are among the funds investing in Invictus.

The company will issue 151,515,152 shares worth US$10 million in a private placement. Mangwana Capital, a private equity fund already invested in Invictus on behalf of multiple pension funds, will then list the stock as depository receipts on the Victoria Falls Stock Exchange (VFEX) on Friday, allowing local participation. Mutapa will underwrite US$5 million of the share issue.

“The secondary listing on VFEX will facilitate liquidity for the local demand that exists in Zimbabwe. There’s never been an opportunity like this for local Zimbabweans to invest in our company, and now, through our secondary listing, there is,” says Invictus Energy MD Scott Macmillan.

Invictus announced Zimbabwe’s first gas discovery at its Muzarabani prospect last year. The next phase of the project involves flow tests – which figure out the quantity and quality of the resource – plus raising money for more exploration wells. Oil and gas companies drill many exploration wells, and it typically takes years before production starts. So far, Invictus has drilled two exploration wells.

Mutapa represents the government’s interests in the gas project. Currently, Invictus and Mutapa are discussing a Petroleum Production Sharing Agreement, which sets out how future production and profits will be shared between the company and the government. Apart from production sharing, it has been previously announced that Mutapa will be granted a 10% back-in-right within six months of a final investment decision being made to go ahead with any commercial development. A back-in-right contract allows the government to take shares in the operation.

Mangwana Capital manages the Mangwana Opportunities Fund, which holds shares in Invictus and other assets on behalf of 35 local institutional investors, such as NSSA. In March, Invictus signed up Mangwana to lead negotiations with Zimbabwean institutional funds seeking to invest in the gas prospect.

“Our fund investors comprise a broad range of Zimbabwe’s institutional investors and our Investment in Invictus will ensure that they share in the success of the company,” says Mangwana MD Ben Mbanga.

Former Delta Beverages CEO Joe Mutizwa is a founding director of Mangwana and is Invictus deputy chairman. Mangwana is currently chaired by Kevin Terry, former MD of CABS. Apart from resources, it is also invested in agriculture and manufacturing.

Source: NewZwire