Renergen loses three directors at once

Three directors have resigned from energy company Renergen with immediate effect, which the company says is because it has changed from an exploration into a production company.

Nonexecutive directors Alex Pickard, Francois Olivier and Bane Maleke resigned and while it is unusual for three directors to leave at once, the company said this had been planned 12 months in advance due to the shift in strategy. Two new directors have been appointed.

Renergen, which produced its first liquefied natural gas (LNG) in September and helium in January after a year of delays, said as it “gears up into this new phase, it is appropriate to sculpt the senior leadership team accordingly”.

CEO Stefano Marani told Business Day the changes were made because it is now producing helium and as it did not have an exact date when this would come to fruition it had not made any advance announcement of the resignations.

“It’s not ... that they walked out. We knew that we were going to make these changes but the exact date wasn’t certain. To co-ordinate all five [changes] at the same time, we made all of the appointments effective immediately.”

Renergen is said to have one of the world’s largest helium concentrations and is one of eight companies across the globe that produces the gas, an essential component in the manufacture of semiconductor chips used in computers and cars.

The firm said in a statement: “We sincerely thank Alex, Francois and Bane for all the invaluable insight in navigating the challenges associated with developing a greenfield project.”

Documents released in Australia in December showed it had enough cash for one-and-a-half quarters. However, the loss-making firm is now selling liquid gas and helium and raised an additional R107m by issuing more shares, which should help with liquidity.

Lawyer Thembisa Skweyiya and Dumisa Hlatshwayo started as executive directors immediately. Skweyiya serves on the boards of Woolworths and Sanlam. Hlatshwayo has served on the boards of Aveng Manufacturing and Alexforbes, where he was the financial director.

“We felt these were incredibly powerful additions to the board. Instead of focusing on a walkout of three directors, which is a completely misleading way to look at it, this is the natural progression of the company, from exploration to production stage.

“We’re bolstering the board with new talent, new ideas and competence.”

Pickard is the vice-president of corporate development at Canadian mining company Ivanhoe Mines and was on the board for just more than 10 months. Ivanhoe holds a 4.35% interest in Renergen, but a deal proposed in 2022 to buy 55% of the firm to fund Phase 2 did not come to fruition. 

Renergen is pursuing a listing on the US’s Nasdaq exchange as it needs to raise capital for further funding of its phase 2 projects. This would be its third listing after its primary in Australia and secondary on the JSE. 

The listing will dilute the value of existing shares, Marani told Business Times. “All will be revealed in due course, and we will make it clear. People have missed the trick. I get a sense that people are thinking we will issue a huge amount of stock for the purposes of building phase 2. It is simply not going to be the case.”

The first phase is to have an expected output of 2,700GJ of LNG and 300kg of helium a day. 

Marani said the listing on the Nasdaq was about raising equity for phase 2 of its development. The US market understands helium and LNG and the cleaner energy transition better than the SA or Australian markets.

“If ... we raise capital at a higher valuation than on the Australian Stock Exchange and on the JSE, then surely it stands to benefit all SA shareholders and pensioners if their stock price appreciates.”

Renergen’s share price fell the most in a week on Monday, down 1.68% to R25.68.

childk@businesslive.co.za