AUSTRALIAN energy firm, Invictus Energy Limited (IEL) has announced a 25% cut to its board and management annual fees and remuneration in light of global market and oil uncertainty over the coronavirus (COVID-19).
BY TATIRA ZWINOIRA
Due to the uncertainty around COVID-19, global oil market prices have fallen substantially at one point dropping below zero.
“In light of the global market and oil industry environment, the board and management has focused on reducing costs within its control,” said IEL managing director Scott Macmillan, in a quarterly update.
“To this end, the company has made cuts in various categories of its corporate costs in Australia from its already low overheads. The board and management have agreed to reduce their annual fees and remuneration by 25-50% effective April 1, 2020.” Apart from making cuts, IEL has also entered into a binding share subscription agreement to raise capital with the local investor, Mangwana Opportunities, a closed end investment company which is managed by Mangwana Capital.
Mangwana Capital is a local niche investment boutique and private equity firm.
“The share subscription agreement raises the equivalent of AUD0,44 million (US$287 825,48) through the placement of 12 564 143 shares at a share price of AUD0,035; a 91% premium to the preceding 5 day VWAP of AUD0,0183 and a 40% to premium to the last closing price of AUD0,025,” Macmillan said. “The condition precedent to the completion of the placement and the subscription agreement, is subject to approval by the Reserve Bank of Zimbabwe exchange control which is expected shortly.
The shares issued to Mangwana will be held in escrow for six months from the date of completion.” He said funds raised from the placement will be used to advance the Cabora Bassa project including on the ground activity and preparatory works in the project area and CSR programme within the Muzarabani and Mbire districts.
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The agreement makes provision for a further equity investment by Mangwana for the project over the next 12 to 24 months.
Respected businessman and former Delta Corporation Limited chief executive, Joe Mutizwa chairs Mangwana Capital.
Following the agreement between Mangwana Capital and IEL, Mutizwa was appointed as a director of Invictus Energy Resources Zimbabwe Pty Ltd.
Mutizwa also sits on the Presidential Advisory Council which raises potential anti-trust questions as he will have the direct ear of President Emmerson Mnangagwa, giving an unfair advantage in the market. Macmillan said Mangwana was funded by Zimbabwean institutional investors including pension funds and invests primarily in the fields of agriculture, mining and tourism with an investment horizon of 10 years.
He added that the fund has prescribed asset status and has been granted tax exempt status by the Ministry of Finance.