Renergen’s share price leapt more than 21% yesterday morning following an unprecedented action for a JSE-listed company, in that it answered questions from shareholders that arose out of a social media storm.
This price yesterday morning had regained much of last week’s substantial decline, which arose after the company was criticised on social media, principally by well known shareholder activist Albie Cilliers.
South Africa’s first, although developing, on-shore liquid natural gas and helium producer said in a statement yesterday that criticism from the press and social media had led to it fielding shareholder requests for the company to provide an official response to the matters raised publicly.
The media and a social media onslaught also saw it forced to declare on its website last week that it had no involvement or links to state capture, and it also had to defend its rights to produce helium.
The share price traded at R11.99 yesterday morning after falling to as low as R9.90 per share last week during the social media storm. The previous Monday, the price closed at R13.62.
‘’Following a well-penned article by a respected market commentator and seasoned investor in the mining space, in which he outlined how the company had mishandled its reaction to criticism it had received, we acknowledge our initial response was inappropriate and need to do better.
Upon reflection, we should rather have engaged Mr Cilliers directly to address his concerns. We now have an opportunity to address these concerns and to reassure stakeholders of the company's fundamentals,” the company said.
On questions from Cilliers regarding involvement with Gupta-gate implicated Trillian Capital Partners and Integrated Capital Management (ICM), Renergen said ICM was a book runner and prepared the listing filings with the JSE on the company's behalf in early 2015, as well as acting as joint adviser on the de-SPAC process thereafter.
Trillian Asset Management, not Trillian Capital Partners, was a joint book runner for Renergen and a broker custodian for several shareholders. The initial public offering was concluded in June 2015, and Trillian Asset Management was acquired by Trillian Capital Partners several months later.
“Since then, there were and had been no further links between Renergen and these companies, ” the statement said.
Trillian Asset Management also did not own 24% of Renergen, it said. Trillian Asset Management was a custodian holding scrip on behalf of beneficial shareholders in Renergen, in the same way other custodians hold scrip for investors.
“We invite stakeholders who may have questions about any aspect of the company, its operations, management or strategy to engage with us. Additionally, we extend this invitation to Mr Cilliers,’’ CEO Stefano Marani said in the statement.
On questions relating to the chronology of helium production, the company said it had, on January 23, 2023, announced that it had produced liquid helium during commissioning. A leak was subsequently discovered in the helium cold box, which was communicated in the June 2023 quarterly report “which prevented the filling of the ISO container.”
“Subsequently, as disclosed in the September 2023 quarterly report, the repair was completed, and the helium cold box had been returned to site.”
On questions about why the Linde helium container was on site when the company already had a container, Renergen said the during operation, the company filled its owned ISO container, and then transfilled into a customer's ISO container. This reduced the number of days the customer's container would need to stay on-site while it was being filled.
“Given the global shortage of helium and consequently the excess availability of ISO containers, we agreed with our customer we would fill their containers directly, allowing them to receive the product sooner. The leak in the helium cold box has prevented this from taking place.”
The leak in the helium cold box was not the same leak as reported in December 2022. The December 2022 leaks were identified in the interconnecting cryogenic pipelines that existed between the LN and helium modules and which were repaired on-site.
On current production capacity, the group said it had made clear in communications that the plant would begin at reduced capacity and would ramp up, as evidenced by the increasing production figures. Nameplate production was expected by the first half of 2024.
On questions about whether Marani and chief operating officer Nick Mitchell were selling stock, the company said save for a donation by each director to direct family members and shares disposed of to cover tax liabilities arising from exercising remuneration share options, Marani and Mitchell had not disposed of any shares.
“On the contrary, they have increased their net position,” Renergen said.
On questions about the company using social media to hype up the share price, Renergen said that being the world's first listed helium company (a niche commodity) required a platform to educate investors on helium. Social media remained an effective tool for education and information sharing,’’ it said.
BUSINESS REPORT