Nasdaq-listed ASP Isotopes plans to buy 100% of the company. From Moneyweb.
Energy producer Renergen’s share price shot up 50% in trade on Tuesday (20 May) on news that Nasdaq-listed ASP Isotopes plans to make an offer to buy 100% of the company’s shares.
The shares jumped from R6.79 to more than R12 on Tuesday before settling back to R11. The shares have fallen from around R40 in 2002 due to delays and technical difficulties in meeting expected production targets.
Renergen operates the onshore Virginia gas plant in the Free State and is SA’s first integrated producer of both liquefied helium and liquefied natural gas (LNG). Helium production commenced in the last financial year, and the company this week announced plans to ramp up both LNG and helium output in the coming year.
Listen: Renergen finally produces liquid helium
ASP Isotopes says the two businesses are complementary, and the acquisition of Renergen aims to create a global leader in the production of critical and strategically important materials, including electronic gases such as helium, various fluorinated products, and isotopically enriched gases.
The combined group is slated to generate more than $300 million (R5.4 billion) in earnings before interest, tax, depreciation and amortisation by 2030.
Renergen’s “highly unique” helium asset is expected to benefit from $750 million (R13.5 billion) of committed debt funding from the US government’s development finance institution and other lenders to expand plant production capacity in South Africa.
Renergen CEO Stefano Marani said in a Sens statement that the deal gives the company access to the US investor base, “who have a deep understanding of critical minerals, as well as oil and gas has for the longest time been the final critical ingredient required to unlock the Virginia Gas Project and the longer-term expansion of this unique natural resource. In joining our two companies not only do we get this, but even more exciting is the expansion of the business horizontally across our key helium customer bases of nuclear, healthcare, semiconductors and rocketry.
“As the world becomes more insular, critical materials are quickly becoming the most sought-after commodities, and our merger places ASP Isotopes Inc front and centre.
“Offering customers a fully integrated supply chain reduces a significant amount of risk for them, and makes our offering incredibly valuable,” said Marani.
Under the proposed scheme of arrangement, Renergen shareholders will receive 0.09196 new ASP Isotopes shares for each Renergen share. If the scheme is not implemented, ASP Isotopes will make a general offer to Renergen shareholders to acquire 100% of the issued share capital. Renergen will then become an operating subsidiary of ASP Isotopes, with Renergen shareholders owning 16% of the combined company.
Marani will become ASP Isotopes’ CEO of Electronics and Space, based in Austin, Texas, and will join the company’s board of directors.
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ASP Isotopes’ stock price is up 18% over the last four days. The company develops and produces isotopes for use in multiple industries. Initially focused on producing and commercialising highly enriched isotopes for the healthcare and technology industries, it is also expanding into the nuclear energy sector using quantum enrichment technology that the company is developing.
The company has isotope enrichment facilities in Pretoria dedicated to the enrichment of isotopes of elements with a low atomic mass.
There is a growing demand for isotopes in quantum computing, healthcare, and green energy.
