‘The time has come.’ Renergen shakes up its board | Business

Drilling in the Free State.

• Energy group Renergen announced the departure of three non-executive directors on Monday.
• According to the company, this formed part of its transition from an exploration group.
• The group is currently raising funds for the next phase of its Virginia project, and announced that it was issuing new shares worth R118 million.
• For more financial news, go to the News24 Business front page.

Helium and natural gas group Renergen has announced the departure of three non-executive directors on Monday. The company says this is part of gearing up for a new production phase after its start as an exploration company.

Alex Pickard and Francois Olivier will step down with immediate effect, while the company said Bane Maleke (72) is retiring, the firm said.

The miner appointed two new non-executive directors: Thembisa Skweyiya, currently on the boards of Woolworths and Sanlam, and Dumisa Hlatshwayo, formerly a director of Alexander Forbes and Aveng.

Renergen, currently valued at about R3.5 billion on the JSE, reported its first liquid helium production in January, which followed its liquified natural gas plant becoming operational in September.

Renergen holds SA’s only onshore petroleum right, namely the Virginia Gas Field in the Free State. The field has some of the highest helium levels ever recorded. The light gas has been viewed as a strategic commodity, with applications ranging from high-end manufacturing processes, rocket propulsion, as well as medical technology.

CEO Stefano Marani says it had always been the plan that both Olivier, a board pick from the miner’s second biggest shareholder Mazi Asset Management, and Olivier, who represented shareholder Ivanhoe Mines, would depart once the company started production. 

“That time has come,” he said.

Mazi held just over 11% in Renergen at the end of its 2022 year, with Olivier joining the board in 2018. Ivanhoe had picked up a more than 4% stake in Renergen in 2022, with an option for a controlling stake that later lapsed.

Mazi’s chief investment officer Asanda Notshe said on Tuesday the asset manager felt that it was important to support Renergen’s executives through a board seat, given that substantial client funds had been invested, but the intention was always to vacate that seat once important milestones were reached.

Asked about vacating the seat despite being a sizeable shareholder, Notshe said Mazi did have some clients that frowned upon asset managers occupying board seats in investee companies. “Their view is that this introduces potential conflicts of interest and would therefore prefer for this not to be a practice. We are therefore also responding to these concerns from important stakeholders in our company,” he said.

“We are in full support of the company’s strategy to introduce a broader shareholder mix and therefore believe that there is no further need for us to continue with the board seat,” Notshe added.

Renergen has been looking to raise funds for a second, more ambitious phase of its Virginia project, and had said in January it was considering listing on the US Nasdaq. On Tuesday, the group held an accelerated bookbuild where it raised about R110 million, or 3.2% of its share capital, in order to progress funding of phase two.

By Tuesday afternoon, its share price had given back 5% since the start of the week.

Skweyiya has a background as a lawyer, starting her career at a New York-based firm before shifting into local and international investment banking roles, while Hlatshwayo, a chartered accountant, has extensive experience across the financial and manufacturing industries.

Marani also said on Monday that things were proceeding smoothly at Renergen as it continues its deliveries.

“We are in the optimisation phase on integrating the helium and LNG, and deliveries of LNG are still progressing as per normal. There is not really much to say from an operations standpoint … it’s all pretty seamless.”