MUTAPA Investment Fund has committed to underwrite US$5 million of US$10 million strategic capital raise for Invictus Energy, demonstrating long-term support for the firm’s Cabora Bassa project.
Invictus is exploring for gas and oil in Zimbabwe.
Mutapa also committed to finalise and implement the petroleum production sharing agreement (PPSA), which provides a stable and transparent legal and fiscal framework to govern the project, according to a statement released yesterday.
The PPSA is designed to ensure fair and equitable sharing of the project’s revenue between the government, Invictus and its partners, fostering a mutually beneficial partnership that supports the project’s long-term success.
“We are thrilled with the overwhelming support from Zimbabwean institutional investors, particularly the Mutapa Investment Fund as our future partners in the project on behalf of the Republic of Zimbabwe,” Invictus managing director Scott Macmillan said.
“Mutapa’s investment is a strong endorsement of the Cabora Bassa project and recent significant gas-condensate discoveries delivered from Mukuyu-2. Further support of institutional investors and the Mangwana Opportunities Fund strengthens our investor base and in-country presence.
“Our partnership with Mangwana continues to assist the company advance key objectives in the country and provide exposure for local investors to our world class Cabora Bassa project.”
Macmillan said Zimbabwe’s commitment, through the PPSA, provided a solid foundation for a transparent and stable operating environment, which is crucial for the successful phased and ultimate full-field development of Cabora Bassa.
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“Our farmout process to secure a strategic partner continues to progress well with active discussions advancing with multiple parties,” he noted.
Mutapa’s chief executive officer John Mangudya underscored the government’s commitment, through their support for Invictus and the negotiations of the PPSA, saying this provides a solid foundation for a transparent and stable operating environment, which is crucial for the successful development of this world-class asset through our future partnership.
“The Mutapa Investment Fund’s participation in the development of the Cabora Bassa Project has the potential to generate substantial returns while delivering sustainable benefits to the nation for generations to come,” he said.
“We are confident that our support for Invictus and the project lays the foundation stone for a vibrant and productive oil and gas sector that will contribute to the creation of jobs, generation of exports and delivery of energy security to Zimbabwe.”
Mangwana Capital managing director Ben Mbanga said their fund investors comprised a broad range of Zimbabwe’s institutional investors and their investment in Invictus will ensure that they share in the success of the company.
“The Cabora Bassa project and Mukuyu discovery is a potential game changer for the country which can bring about significant economic benefits and energy security to the entire region,” Mbanga said.
“We look forward to supporting Invictus to achieve their goals in Zimbabwe and furthering our partnership with them.”
As part of the strategic local capital raise, Invictus is seeking greater participation by local investors given the strategic importance of the project to Zimbabwe and significant local interest via the private placement of US$10 million.
As part of the share subscription, Invictus offers up to US$10 million through the issuance of 151 515 152 shares at a share price of AU$0,10 at an AUD/US$ forex rate of US$0,66.
Participants will receive an option to subscribe for one share for every four shares subscribed for under the private placement exercisable at AUD$0,30 with a two-year option period.
Securities issued will facilitate a secondary listing on the Victoria Falls Stock Exchange through issuance of Zimbabwe Depository Receipts to support local liquidity and trading with substantial demand expected.
Funds raised from the strategic placement will be used to advance the Cabora Bassa project, including Mukuyu-2 flow testing and advancement of early monetisation opportunities, purchase of long leads for shallow exploration wells targeting the Eastern Margin and Basin Margin plays and general working capital.
