Online Reporter
Nqobile Bhebhe
Contango Holdings PLC, the London-listed developer of the Muchesu coal project in Hwange District, has received a proposal from Pacific Goal Investments Private Limited (PGI) and Huo Investments to subscribe for approximately 450 450 451 new ordinary shares worth US$5 million.
PGI is a Zimbabwe-focused investment vehicle equally owned by Mr Wencai Huo, the principal of Huo Investments, and Mr Liu Jun. The two investors are long-term strategic partners with a keen interest in unlocking value from Zimbabwe’s vast mineral endowment.
This share subscription proposal is expected to recapitalise the company and allow it to repay all existing shareholder loans.
The proposed transaction is expected to leave the company debt-free and in a position to pay dividends to shareholders as royalty income grows at its flagship Muchesu project.
The Muchesu coal project, with a resource exceeding two billion tonnes, is viewed as a potentially transformative industrial anchor for Matabeleland North, with expected ripple effects on employment, infrastructure development and downstream industries such as power generation and mineral processing
Under the terms of the proposal, PGI and Huo Investments intend to subscribe for 358 680 794 and 91 769 657 new ordinary shares, respectively. This will give the Strategic Investors proposed ownership of 29,7 percent and 20,4 percent, respectively, in the enlarged share capital.
Huo Investments currently holds 154 750 000 ordinary shares in the company, while PGI presently does not have any shareholding in Contango.
The subscription price represents a 39 percent premium to the mid-market closing price on February 12, 2026 — a strong vote of confidence in the company’s underlying value and prospects.
The proposed subscription remains conditional upon the passing of certain resolutions at a general meeting and the obtaining of a Waiver of Rule 9 of the Takeover Code. The company and its advisers are consulting with the Takeover Panel and will publish a circular for the waiver of Rule 9 of the Takeover Code and arrange a general meeting in due course.
Contango chief executive officer Mr Danny dos Santos said the transaction marked a significant turning point for the company.
“I am delighted to announce this conditional Subscription at a healthy premium to current trading levels, which will recapitalise the company and enable us to repay all existing shareholder loans.
“ This will leave the company debt-free and now in a position to pay dividends to shareholders as royalty income grows at Muchesu,” he said.
The capital injection is expected to strengthen Contango’s balance sheet and provide a firm platform for expansion, particularly as operations at Muchesu continue to mature.
Mr dos Santos noted that Huo Investments’ participation demonstrates continued confidence in the company’s strategic direction.
“Huo Investments are already a major shareholder and I am pleased they have elected to maintain their percentage ownership in the Company through a pro rata investment of approximately £1 million.
“PGI have undertaken material capital investment at the site already and with their circa £4 million participation in the subscription, they will become our largest shareholder,” he said.
Combined, the long-term strategic investors will hold approximately 50 percent of the enlarged share capital, underscoring what management describes as strong alignment between new capital providers and existing shareholders.
“Combined, the long-term Strategic Investors will have an approximate 50 percent stake in the company and are heavily aligned with existing shareholders to deliver value within Contango for the benefit of all shareholders.
