A well-known Tanzanian entrepreneur and philanthropist Dr. Reginald Mengi has invested US$30 million in Swala Oil and Gas (Tanzania).
The investment made through his company Energy Tanzania Limited (ETL) will be used to develop the Swala’s current projects.
According to a statement from Swala, the investment, which is contemplated to close in two tranches,consists of a US$30 million Convertible Note that must be converted into ordinary shares of the Company on the earliest of 90 days from the date of subscription or a crosslisting of Swala Ordinary Shares on another stock exchange and in anyevent no later than one year from the date of subscription. “The conversion rate will be on the basis of an agreed 30/75, implying a pre-money valuation of Swala of US$45 million and a 125% premium to its current market capitalization.Upon conversion, ETL will own approximately 46% of the Company.” Reads the statement in part.
Swala is in the process of closing the additional sources of funding with institutional investors and individuals, to be used together with the announced funding to further progress the Company’s current projects.
This the statement adds,includes a further senior debt investment that is contemplated to rank equally alongside the US$25 million of senior debt already raised (as communicated to the market on the 2nd January 2018) as well as additional subscriptions to the Convertible Notes. There are no assurances given that one or more of the transactions will be completed on the terms previously disclosed.
According to the CEO of Swala, Dr. David Mestres Ridge, Swala is pleased to have secured a significant strategic investment by Energy Tanzania Limited, which has been a supportive shareholder since the Company’s listing on the Dar es Salaam Stock Exchange four years ago.
Dr. Mengi has identified the Tanzania energy sector as a strategically important sector with significant opportunity for Tanzanians, and Swala is privileged that he has chosen our Company as his investment vehicle of choice.
“With the support of ETL we aim to continue developing Swala to address the energy demands of Tanzania as it seeks to grow into a middle-income economy, an objective in which the Company, through its direct and indirect investments, can play an enabling role.” He said.
Swala is the first oil and gas company listed on an East African Stock Exchange with a significant local ownership. Swala holds assets in the world-class East African Rift System with a total net land package in excess of 14,000 km2 as well as a 7.93% interest in Mauritius-based PAE PanAfrican Energy Corporation. New discoveries have been announced by industry participants in a number of licences along East African Rift trend that extend the multi-billion-barrel Albert Graben play so successfully developed by Tullow Oil into the eastern arm of the rift.