Sunbird Energy Ltd has announced that binding agreements have been executed in respect of a transaction which, once fully completed, will deliver over AUD$25m into the company at a weighted average premium of up to 79% on the last traded share price and secure a major strategic partner to help advance development of its Ibhubesi Gas Project in South Africa.
The transaction will see the Pan-African investment company, Vandasia Investments Limited (Vandasia), acquire a 43.9% interest in Sunbird via a two stage transaction involving two capital raisings at the equivalent weighted average price of approximately AUD$0.34 per share and the acquisition and conversion of 47.75m existing AUD$0.20 options. Overall, the transaction is priced at a premium of 79% to Sunbird’s last traded share price.
The first stage of the investment, being the issue of 20,367,127 fully paid shares for an aggregate subscription amount of USD$5,000,000, is due for completion in 10 business days and represents a premium of 39.5% to the company’s last traded share price.
The second stage of the investment (which is subject to shareholder approval and execution of a Gas Sales Term Sheet with a potential customer) includes the issue of an additional 23,021,757 shares to Vandasia for an aggregate subscription amount of approximately USD$9,350,000, and the purchase and conversion 47.75m options, which will result in the company receiving approximately an additional US$8,850,000.
This transaction delivers the funding required to advance the Ibhubesi Gas Project to commercialisation and provides Sunbird with a highly capable strategic shareholder with extensive industry experience in Africa.
Sunbird’s Chairperson, Kerwin Rana, said that, “Sunbird is pleased to welcome Vandasia as a strategic partner and major new shareholder. The investment by Vandasia demonstrates the value proposition of the Ibhubesi Gas Project as South Africa’s largest undeveloped gas field and the advanced nature of our gas supply negotiations with potential customers.”
Rana added that, “This transformational financing deal ensures Sunbird is fully funded to advance Ibhubesi through FEED studies, commercial negotiations and regulatory approval to a final investment decision in 2015.“
Vandasia’s CEO, Dr. TJ Lupepe, said: “Vandasia has secured this investment opportunity because it sees Sunbird as the most mature gas development project in South Africa, Africa’s most developed economy. The advanced stage of Sunbird’s gas sales negotiations with potential customers, provides near term access to the South African energy market which has depended largely on coal and oil based fuels.”
Dr. Lupepe went on to add that, “Vandasia is excited to support Sunbird in providing cheaper, cleaner gas to an energy constrained market and contributing positively to South Africa’s energy mix. Importantly, the Sunbird transaction can begin to shepherd in an era of migration to gas as a power source for Africa at large, proving both the technical and financial viability of the resource for generation input.”
Vandasia is a specialist investment company established by a group of leading African industrialists with a focus on developing the vast gas resources in continental Africa. Vandasia is structured to make investments in upstream gas assets, LNG solutions and related infrastructure, as well as gas-to-power projects.