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African Energy Resources to raise funds, Sentient to 19.9%

African Energy Resources to raise funds, Sentient to 19.9%

African Energy Resources (ASX: AFR) is raising up to $4.5 million through a placement and a non-renounceable entitlement to advance its portfolio of coal and power projects in Botswana.

The potential of the company has not been lost on its major shareholder Sentient Executive GP IV, which will acquire 14.9 million shares in the placement to take their ownership to a 19.9% stake.

The capital raising will comprise a $1.5 million placement, and a $3 million non-renounceable entitlement, priced at $0.085 per share.

Funds raised will advance AFR's portfolio of coal and power projects in Botswana.

The Sentient Group manages over US$2.7 billion in the development of metal, mineral and energy assets across the globe.

The AFR directors are also showing their support, with entities associated with them agreeing to purchase 2.4 million shares in the placement.

Non-renounceable rights issue

Eligible shareholders will be given the opportunity to participate in the capital raising on the same terms as the placement via a non-renounceable rights issue, and will be able to participate in a shortfall facility and apply for new shares in excess of their pro rata entitlements under the rights issue.

Sese power project DFS and environmental assessment

Last month AFR said that it soon expects to finalise the Environmental and Social Impact Assessment and Phase 1 of the Definitive Feasibility Study for a 300 megawatt power station and captive 1.5 million tonne per annum coal mine at its Sese Coal project in Botswana.

Sese hosts 2.5 billion tonnes of coal, enough to support multiple 300MW projects for regional power.

Upon completion, it will submit a mining licence application covering enough coal for the full life of the 300MW Sese Integrated Power Project.

It also reiterated at the time that its consortium with Saudi Arabia incorporated company ACWA Power International have been shortlisted to submit a bid for the 300MW Greenfield Power Project.

Highlighting the financial strength of ACWA, it has paid-up capital of around US$1.4 billion - and is owned by eight Saudi conglomerates.

An advantage of Sese is that it is close to existing transmission grid and planned grid extensions, and is matched to power markets in Botswana and neighbouring countries.


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African Energy Resources Timeline

November 01 2012

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