Kinetiko Energy Ltd (ASX:KKO) has caught the eye of prolific South African energy investor Phefo Power and launched a A$3.1 million rights issue.
Under a share placement, Phefo has committed to seed ZAR$10 million in funding, which, on top of the rights issue, will provide Kinetiko with roughly A$4.1 million to pursue exploration opportunities In energy-hungry South Africa.
The raise comes after Kinetiko executed agreements with South Africa’s Industrial Development Corporation to co-develop a gas production field, expected to comprise up to 20 wells.
Expediting Kinetiko’s energy vision
Speaking to the cash injection, Kinetiko executive chair Adam Sierakowski said: “Kinetiko continues to attract South African investment as its vision to become a strategic energy solution in South Africa gains momentum.
“Phefo Power was founded by leading South African oil and gas executives who, beyond their investment, are offering significant strategic assistance.
“In addition, the subscription greatly enhances the percentage of Black Economic Empowerment (BEE) shareholding in Kinetiko, which will expedite the company’s ability to develop its projects in South Africa.”
Strategic investment
Kinetiko is especially excited about Phefo’s investment because it will bolster the company’s BEE certification.
The new investor’s stakeholders comprise leading South African oil and gas executives, who have subscribed for 30 million fully paid ordinary shares in exchange for ZAR$10 million in funding.
These subscription shares will be issued pursuant to the company’s existing annual placement capacity and are expected to be issued on or about May 26, 2022.
Rights issue
In addition to the strategic placement, Kinetiko has announced a renounceable, one-for-15 rights issue to raise A$3.1 million before costs.
The rights issue is priced at $0.075 per share — a 10% discount to the company’s last closing price, and a 14% discount to the 10-day volume-weighted average price.
Lead manager and underwriter Mahe Capital has underwritten the offer to A$1.5 million.
Kinetiko’s rights issue is set to open on Wednesday, May 4 and close on Thursday, May 19. New shares will be issued a week later on May 26.
