Renergen comes clean on mystery customer


Renergen comes clean on mystery customer


Published Date: 2021-04-14 | Source: Stephen Gunnion | Author: Stephen Gunnion

Renergen comes clean on mystery customer

The company halted trade in its shares in Australia after a market announcement fell short on disclosure.

Renergen was forced to halt trade in its shares on the Australian Securities Exchange (ASX) yesterday after it told investors on Monday that it had a buyer for some of its helium, without disclosing details of the deal. Under ASX rules, such announcements have to give investors enough detail to understand the ramifications and assess the impact on the value of a company's shares, amongst other requirements.

In Monday's announcement, the emerging helium and natural gas producer said it had reached a conditional sales agreement with a global automotive supplier in its first "Direct-to-Customer" helium deal. However, for reasons of confidentiality it said it was unable to disclose the customer or the details of the transaction, which would see a substantial volume of helium from Phase 2 of its Virginia Gas Project in the Free State placed directly to the customer, underpinning the development. The helium would be used to inflate airbags in cars and CEO Stefano Marani said it would likely be a feature in German premium brand vehicles from 2024.

In a subsequent announcement yesterday, it revealed that the 10-year sales agreement was with Austria-based company iSi Automotive GmbH and would commence on the completion of construction of the Phase 2 Plant, which is expected in the second half of 2023. Before that, it expects to complete feasibility studies by the end of June, before its board makes its financial investment decision later this year.

The agreement is also conditional on a number of project development milestones.

Renergen said it would require capital in some form and at some stage to commence construction of Phase 2 but was still in the process of considering options and completing the feasibility studies. It hadn't formally engaged with investors, nor begun pricing guidance.

Renergen's shares declined by 4.67% to R26.71 yesterday, paring gains for the year to 115%.


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