Mahube Infrastructure to delist from JSE following premium buyout offer

Mahube Infrastructure, which listed on the JSE in 2015 and initially traded as GAIA Infrastructure Capital, has been made an offer to delist and taken private in terms of a scheme of arrangement.

Mergence Renewable Energy Debt Fund II Trust, managed by Mergence Investment Managers, and Specialised Listed Infrastructure Equity En Commandite Partnership (SLIEP), managed by Creation Capital, have established a new special purpose vehicle called Sustent Holdings, as the offeror, a statement said Tuesday.

The transaction offers an opportunity for shareholders wishing to exit their investment at a premium to the share trading price. At R5.50 per share cash, the offer represents a premium of 30.64% to the R4.21 closing share price, and a 32.31% premium to the 30-day volume weighted average share price of Mahube of R4.16 per share, as at January 22, 2025.

This was the last practicable date prior to the offeror communicating its intention to launch the proposed transaction to the company.

To the offering consortium, the transaction, still subject to various approvals, presents a good investment opportunity to participate in an established pool of assets that exhibit the commercial, financial and operational characteristics that align closely with the offeror's investment profile, a statement said.

Mergence Investment Managers has extensive experience in renewable energy investing, having launched its first private debt fund focused on South Africa's successful Renewable Energy Independent Power Producers Procurement Programme (REIPPPP) in 2013.

"In its delisted form, Mahube can reduce a significant portion of its cost structure and more importantly it will be valued in line with private market valuation methodologies, as opposed to sentiment-driven pricing on the JSE," said Mosa Molebatsi, Head: Private Debt at Mergence Investment Managers.

"Furthermore, as a delisted entity, Mahube can be positioned as a vehicle that aggregates equity stakes in projects from earlier rounds of the REIPPPP. This will position Mahube as a significant player for private equity investments in large-scale infrastructure assets in South Africa and possibly beyond," Molebatsi said.

Creation Capital chief investment officer Freddy Magoro said: "The transaction marks a high point in Creation Capital's objectives to deliver innovative, long-term investment solutions to our clients. Infrastructure investing remains a key pillar of our strategy, and Mahube's portfolio, underpinned by stable REIPPPP agreements, is a high-quality asset that fully executes on this vision."

He said taking Mahube private was the first step in unlocking long term value and positioned the company to accelerate capital raise into much needed infrastructure projects.

Mahube was listed as a Special Purpose Acquisition Company (SPAC). It is the holding company for minority stakes in five renewable energy assets: three solar and two wind farms with a total generation capacity of 400 MW. The projects form part of Rounds 1 and 2 of the REIPPPP and are covered by Power Purchase Agreements (PPAs) with Eskom. As a listed entity, Mahube struggled to scale beyond its initial portfolio.

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