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Kudzanai Sharara
A local investment fund has bought shares in Invictus Energy Limited that is prospecting for gas and oil in the Muzarabani area, the company revealed in a statement yesterday.
The two companies have already signed an equity subscription agreement and the deal is now awaiting approval by the Reserve Bank of Zimbabwe Exchange Control in the near term.
The deal, which was described by Invictus managing director Scott Macmillan as “very important”, will see Mangwana Opportunities Fund, take up 12,564,143 shares valued at AUD$0,44 million or US$287,812.
Mangwana Opportunities Fund is an investor owned, closed end Investment Company which is managed by Mangwana Capital.
It is funded by Zimbabwe institutional investors including pension funds and invests primarily in the fields of agriculture, mining and tourism with an investment horizon of 10 years.
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.
In a response via text message, Macmillan said the coming on board of Mangwana, which is chaired by veteran businessman Joe Mutizwa, is very important as it allows local investors to benefit as well from the Muzarabani project.
He said given that Invictus Energy Limited is headquartered in Australia, and also considering the restrictions that have come with the coronavirus pandemic, having a local strategic partner will smoothen operations.
It is “very important to have local partners, and particularly during times like this with the limited ability to travel”.
“Although I am Zimbabwean and our company has Zimbabwean roots and management team, I think we can sometimes be portrayed as a foreign company coming to pillage because we don’t have any local ownership,” he added.
MacMillian said having a local partner provides the project with the additional support in country.
“Mangwana handle a lot of pension money as well so local investors will benefit as well,” he noted.
His said the new local partner is in addition to the Production Sharing Agreement, currently under discussion with the Government.
The Production Sharing Agreement will ensure the whole country benefits from the resource, MacMillian said.
“But in the meantime it (Mangwana) does give local investors direct ownership too.”
Mutizwa who has since been appointed as a director of Invictus’ 100 percent local owned subsidiary Invictus Energy Resources Zimbabwe, said the Muzarabani project is a “game changer” for the country.
He said the project can bring about significant economic benefits and energy security to the entire region.
Online Reporter