ZIMBABWE – Invictus Energy, an oil and gas exploration company advancing the Muzarabani project in Zimbabwe, has signed an equity subscription agreement with Mangwana Opportunities Fund, a leading local private equity fund.
Invictus has entered into a binding share subscription undertaking with Mangwana, which holds prescribed asset and tax exempt status from the Ministry of Finance and Economic Development.
Mangwana Opportunities Fund is managed by Mangwana Capital, which is funded by Zimbabwean institutional investors including pension funds, with investments majoring in agriculture, mining and tourism fields.
The fund is an investor owned, closed end investment company and has a decade long investment horizon.
The share subscription agreement raises the equivalent of US$0.28 million through placement of 12 564 143 shares at a share price of US$0.022, a 91 percent premium to the preceding five-day Volume-Weighted Average Price of US$0.012 and 40 percent premium to the last closing price of US$0.016.
The shares issued to Mangwana will be held in escrow for six months from the date of completion and the agreement makes provision for an additional equity investment by Mangwana for the project over the next 12-24 months.
The condition precedent to completion of the placement and the subscription agreement remains subject to approval by the Reserve Bank of Zimbabwe Exchange Control and is likely to be received in the near-term.
Analysts said the inclusion of a strategic Zimbabwe institutional investor like Mangwana is likely to be a beneficial addition to Invictus Energy’s development strategy locally.
Funds raised from the placement will be used to advance the Muzarabani Project including preparatory works along with on the ground activity in the project area.
This also enhances Invictus Energy’s corporate social responsibility programme within the Muzarabani and Mbire Districts of Mashonaland Central where the project is based and others in country activities.
Moreover, considering the global market and oil industry environment, securing this funding ensures that the project spending is unaffected and the company’s exploration programme remains on track.
Invictus’ Cahora Bassa Project encompasses the Muzarabani Prospect, a multi-TCF and liquids rich conventional gas-condensate target, which is potentially the largest, undrilled seismically defined structure onshore Africa.
The prospect is defined by a robust dataset acquired by Mobil in the early 1990s that includes seismic, gravity, aero-magnetic and geochemical data.
Along with this agreement, Invictus Energy announced the appointment of Joe Mutizwa, current chair of Mangwana Capital and a respected Zimbabwean businessperson as the director of Invictus Energy , 100 percent owned local subsidiary of Invictus Energy Resources Zimbabwe.
Mr Mutizwa, current chairman of Mangwana, has served for 10 years as chief executive of Delta Corporation.