African investment and advisory firm Averi Finance and JSE-listed mining investment company Mantengu have entered into substantive negotiations for a reverse merger that will create a pan-African investment platform listed on the JSE and provide Mantengu shareholders with direct exposure to Africa’s oil and gas, energy infrastructure and critical minerals opportunities.

Under the terms of the proposed transaction, Averi will consolidate its entire asset-backed portfolio into the enlarged Mantengu group in exchange for the issuance of 650-million new Mantengu ordinary shares, giving Averi a 66.7% interest in the expanded listed entity upon completion.

Under the indicative terms of the proposed transaction, Averi has been attributed an implied equity value of R2-billion and Mantengu an implied equity value of R1-billion, which will result in a combined group with a pro forma enterprise value of about R3-billion.

Existing Mantengu shareholders, who currently hold 325-million ordinary shares, will retain a 33.3% interest in the enlarged group. All financial terms, including final valuations, remain indicative and subject to the satisfactory completion of rigorous due diligence by each party. Definitive terms will be announced in due course.

“The proposed transaction creates compelling strategic value for Mantengu shareholders. At current share price levels, Mantengu trades at a significant discount to its net asset value and to its fair value.

“Access to Averi’s capital platform will accelerate Mantengu’s ability to grow and expand its operations, providing the enlarged group with new sources of liquidity to increase mining production during periods of high commodity prices and the flexibility to scale back during downturns.  

“Access to growth capital has long been a structural constraint for midtier JSE-listed miners and this transaction directly addresses that challenge,” says Mantengu CEO Magen Naidoo.

Averi is a Mauritian-regulated, asset-backed investment platform with licensed and contracted positions across power transmission, energy trading, renewables, oil and gas and digital infrastructure in Southern Africa. This company’s advisory and transaction record spans more than 100 transactions representing over $15-billion in cumulative value, and its portfolio is purpose-built for access to institutional and public capital markets.

“This transaction marks a pivotal moment for Averi Finance. We have spent years building a differentiated, asset-backed investment holding company across Africa’s most strategic energy and infrastructure corridors.

“Gaining a public listing through this reverse merger gives us a structurally stronger balance sheet, broader access to institutional capital, and a scalable platform from which to pursue our next phase of growth – expanding into new and underdeveloped mining and energy jurisdictions across the African continent.

“The combination of Averi’s diversified investment portfolio and Mantengu's established mining operations creates a uniquely integrated, asset-backed pan-African investment platform," says Averi Finance founder and CEO Gaspar Lino.

The transaction, as currently structured, is expected to be classified as both a Category 1 transaction and a Reverse Takeover under the JSE listings requirements, triggering a change of control under the Companies Act.

Therefore, Mantengu will be required to issue a circular to shareholders and convene a general meeting to seek approval, with a waiver of the resulting mandatory offer obligation under the Companies Regulations anticipated to be a condition of the transaction.