Offer made for JSE-listed renewable energy company to be delisted and taken private
Mahube Infrastructure has been made an offer to be delisted and taken private.
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Mahube Infrastructure, a company listed on the JSE in 2015 and initially trading as GAIA Infrastructure Capital, has been made an offer to be delisted 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 incorporated a new special purpose vehicle called Sustent Holdings, as offeror.
At a cash consideration of R5.50 per share, the offer represents a premium of 30.64% to the closing share price of R4.21 and a premium of 32.31% to the 30-day volume weighted average share price of Mahube of R4.16 per share as at 22 January 2025, which is the last practicable date prior to the offeror communicating its intention to launch the proposed transaction to the company.
Mosa Molebatsi, head of private debt at Mergence Investment Managers, said: “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.
“Furthermore, as a delisted entity, Mahube could 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.
Freddy Magoro, chief investment officer of Creation Capital, said: “The transaction marks a significant 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. Taking Mahube private is the first step in unlocking long term value and positions 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 ca 400 MW. The projects form part of Rounds 1 and 2 of the REIPPPP and are covered by power purchase agreements with Eskom.
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Smart move to take Mahube private given the gap between public sentiment pricing and actual cash flow fundamentals. The 30% premium is fair but the real value unlocks post-delisting when cost structures shrink and they can pivot to aggregating RE IPPPP equity from early rounds. Private valuation methodologies will treat stable government-backed cashflows way better than JSE volatility ever did.