{"id":362,"date":"2022-03-28T14:11:41","date_gmt":"2022-03-28T14:11:41","guid":{"rendered":"https:\/\/bluegemresearch.co.za\/?p=362"},"modified":"2022-03-28T14:11:43","modified_gmt":"2022-03-28T14:11:43","slug":"renergen-government-investor-highlights-virginias-value","status":"publish","type":"post","link":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/?p=362","title":{"rendered":"Renergen &#8211; Government Investor Highlights Virginia&#8217;s Value"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><em>Share code: REN &#8211; Market Cap.: R5.1bn &#8211; PE: -114x &#8211; DY: 0.0%<\/em><\/p>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-6a25d1d6-9ca1-49a0-9959-809c305c055b\" href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/03\/Renergen_Ad-Hoc-Update_28-March-2022-1.pdf\">Renergen &#8211; Update &#8211; 28 March 2022<\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/03\/Renergen_Ad-Hoc-Update_28-March-2022-1.pdf\" class=\"wp-block-file__button\" download aria-describedby=\"wp-block-file--media-6a25d1d6-9ca1-49a0-9959-809c305c055b\">Download<\/a><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>News: South African Government invests directly<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>South Africa\u2019s Schedule 2 state-owned diversified energy company, <a href=\"https:\/\/www.cefgroup.co.za\/about-cef\/cef-overview\">Central Energy Fund (CEF)<\/a>, has signed a non-binding term sheet to invest R1bn into Renergen\u2019s wholly-owned subsidiary that houses the Virginia Gas Project, Tetra4, in exchange for new shares equalling 10% of Tetra4 being issued.<\/li><li>The agreement leaves 141 days for the CEF to complete a due diligence, get necessary approvals, &amp; sign a binding legal agreement with Renergen. This period can be extended &amp; Renergen has the option to renegotiate the price.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Our Thoughts: Adds momentum, derisks further &amp; implies fair value<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>This deal adds further momentum to the direct investment into the Group by Ivanhoe Mines, further capitalizes Phase II <em>and<\/em>, more subtly, aligns this project\u2019s success directly with domestic Government that somewhat politically &amp; regulatory derisks it.<\/li><li>Management has confirmed that the CEF deal is backed by Ivanhoe Mines. Thus, it may add to the probability that Ivanhoe Mines will follow their remaining rights at Group-level.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Valuation and Implied Return: CEF price tag implies 6946cps<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Given the proximately to our last note, we have not updated our fair value for Renergen and maintain it at 5821cps (previously: 5821cps) with a 12m TP of 6867cps (previously: 6867cps).<\/li><li><strong>The R1bn price attached to 10% of Tetra4 implies a valuation of R9bn for the remaining 90% held by Renergen, or c.6946cps per issued REN share (=R9bn \/ c.129.5m issued shares).<\/strong><\/li><li>While this implied valuation is only indicative (the CEF likely has different criteria for making\/valuing investments than stock market minorities, the investment further derisks the project, &amp; shareholding in a subsidiary does not take into account other Group assets nor HoldCo costs), it <em>certainly<\/em> highlights how undervalued Renergen\u2019s shares potentially are.<\/li><\/ul>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-670986f2-70b1-484b-adfc-0a068188d666\" href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/03\/Renergen_Ad-Hoc-Update_28-March-2022-1.pdf\">Renergen &#8211; Update &#8211; 28 March 2022<\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/03\/Renergen_Ad-Hoc-Update_28-March-2022-1.pdf\" class=\"wp-block-file__button\" download aria-describedby=\"wp-block-file--media-670986f2-70b1-484b-adfc-0a068188d666\">Download<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Share code: REN &#8211; Market Cap.: R5.1bn &#8211; PE: -114x &#8211; DY: 0.0% News: South African Government invests directly South Africa\u2019s Schedule 2 state-owned diversified energy company, Central Energy Fund (CEF), has signed a non-binding term sheet to invest R1bn into Renergen\u2019s wholly-owned subsidiary that houses the Virginia Gas Project, Tetra4, in exchange for new [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[100],"tags":[141,142,13,102,101,60,20,30,16],"class_list":["post-362","post","type-post","status-publish","format-standard","hentry","category-renergen-ren","tag-cef","tag-central-energy-fund","tag-equity-research","tag-ren","tag-renergen","tag-research","tag-small-cap","tag-small-caps","tag-south-africa"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/362","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=362"}],"version-history":[{"count":3,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/362\/revisions"}],"predecessor-version":[{"id":368,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/362\/revisions\/368"}],"wp:attachment":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=362"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=362"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=362"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}