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(Bloomberg) — Dubai-based Averi Finance is in talks with Mantengu Ltd. over a reverse takeover of the South African mining firm that would result in the Middle Eastern company listing in Johannesburg.
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Mantengu will issue 650 million new shares for the deal, which will see Averi transferring its portfolio of projects, ranging from oil and gas to renewable energy and digital infrastructure into the company, Averi founder and Chief Executive Officer Gaspar Lino said in an interview. Averi will control 66.7% of the group and Mantengu shareholders the rest after the transaction, he said.
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Averi, which is headquartered in Dubai and is Mauritius-regulated, is seeking a listing on the continent because it has invested in projects across ten African markets over the last decade, including South Africa, Angola and the Democratic Republic of the Congo, Lino said. The group has concluded transactions in Africa to the value of about $15 billion, he said.
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“A public listing will provide us better access to institutional investors and wider sources of capital, and we plan to scale and grow our portfolio,” said Lino. “We considered Mauritius, London and US to list, but decided the JSE is the right market for us as we continue our strategy to invest in Africa.”
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Still, talks are at an early stage, and there are no guarantees that a deal can be reached, said Lino.
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According to the terms, the implied enterprise value is about $179 million. The group is aiming for about $1 billion in revenues over the next three years, he said.
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Mantengu’s current CEO Magen Naidoo said the parties have decided on a name change if a deal goes ahead, and will then configure management and the board. He said expectations are that the enlarged entity could move to the main board of the JSE.
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The Johannesburg-based miner began a consultation process with employees and a labor union at a unit regarding potential job cuts after deciding not to resume silicon carbide production due to high electricity tariffs.
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