Renergen shares rise despite its initial loss

File picture: Denis Farrell

File picture: Denis Farrell

Published May 30, 2016

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Johannesburg - Renergen’s share price closed 7.69 percent higher on the JSE on Friday at R14 a share on Friday as it posted its maiden results with an R18.45 million loss.

The company, which focuses on the alternative and renewable energy sectors in South Africa and sub-Saharan Africa, said its intention in the future was to maximise returns to shareholders by acquiring viable alternative and renewable energy businesses which were integral to its vertical integration in the supply chain.

Read: Renergen hits gas in Free State

Renergen acquired its first viable asset, Tetra 4, in November for R5m in cash and 70 million shares in a deal valued at R650m. The agreement to acquire 90 percent of Tetra 4, previously known as Molopo, was entered with Windfall Energy Propriety Limited. The Tetra 4 acquisition closed on December 2, 2015, at which time Renergen became an operating company listed on the AltX of the JSE.

The company, which describes itself as the first alternative energy company to list on the JSE, had not generated any revenue in the reporting period, but said it started earning income in May. Chief executive Stefano Marani said: “We have made pleasing progress in the few months since listing on the JSE.”

The company’s highlights for the period were when it announced its revenue generation commenced in May this year. Tetra 4 entered into an agreement with Afrox to process and market helium from a Free State helium and natural gas field in a 187 000 hectare natural gas field in Virginia, near Welkom, with proven reserves of 25 billion cubic feet. The companies said it was the first and only onshore petroleum and natural gas right in South Africa.

“Helium is scarce and it tends to be found trapped with natural gas in relatively low concentrations, typically up to 1 percent by volume of the gas released. The Free State helium and natural gas field, however, enjoys concentrations of up to 4 percent by volume,” said Marani.

 

Renergen describes itself as an investment holding firm which aims to participate in the growth of the African alternative energy sector and benefit from the growing need for alternative and renewable energy in South Africa and in sub-Saharan Africa. Its total assets exceed total liabilities by R90.9m as at the end of the reporting period.

BUSINESS REPORT

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