Shumba Coal to debut on Mauritius bourse
Brian Benza | Tuesday May 6, 2014 12:52
The company plans using the bourse in the tourism haven as an alternative fund raising platform for the local coal focused miner.
In a statement released to the Botswana Stock Exchange (BSE) yesterday, the company said the Stock Exchange of Mauritius has granted approval to Shumba Coal Limited for the private placement and admission of up to 50,000,000 new ordinary shares at a price of $0.12 per share. This represents a value of $6 million (P51 million). The offer will start on May 27, 2014.
The company will also place by way of the introduction 7.5 million new ordinary shares to be issued against application monies amounting to $900,000 already received from investors on the bourse.
“The offer of the 50,000,000 shares will start on 27 May 2014 while trading will start in early July,” said the company.
In an interview with Mmegi Business last week, Shumba coal managing director Mashale Phumaphi said that the listing on the Mauritius bourse would provide the company with alternative sources of funding
“If you look at the profile of Mauritius and Botswana we are very similar in terms of risk and population. The listing opens more doors for us because we are listing in US$ and it allows more investors to come and invest in our projects because Mauritius is seen as a gateway to Africa. On the Mauritius Stock Exchange, outsiders do 40 percent of the trades and this listing augments what the BSE doesn’t have.
“It adds another avenue for us to explore in terms of funding,” he said.
Shumba is aiming to commission a mine by 2017 with the possibility of both coal and power exports.
“We intend to be here for a long time and the more tools you have in your back pocket, the better. The Mauritius investors are not speculative, they believe in the future of the company. You need investors who believe in the potential of the project and the future of the company,” said Phumaphi.
Shumba Coal says it is assessing the viability of exporting power from its proposed 300MW plant at its flagship Sechaba Energy Project (SEP) near Morupule.
It described options available to export power from the SEP to South Africa, Zimbabwe and Namibia.
Shumba, which is majority owned by citizens, joins other firms such as African Energy and Jindal that are making strides towards monetisation of Botswana’s estimated 212 billion tonne coal resources through exports. The SEP will be a 300MW power station with the full output injected into BPC’s 400kV high-voltage transmission grid at the nearby Morupule B 400kV sub-station.
Currently, the Sechaba Project has approximately one billion tonnes of thermal coal resources. The company believes that due to the SEP’s proximity to the A1 highway, railway line and the existence of large resources of ground water and two river basins, the project is potentially well situated for the development of a mine and a power station.