Mangwana Capital to lead talks with local funds showing ‘strong interest’ to bet on Invictus Energy

Invictus Energy has signed up private equity firm Mangwana Capital to lead negotiations with Zimbabwean institutional funds that are seeking to invest in the energy prospect.

Mangwana Capital manages the Mangwana Opportunities Fund, which holds shares in Invictus and other assets on behalf of 35 local institutional investors, including pension funds such as NSSA. Invictus has recently confirmed a gas find at its project in Zimbabwe and is looking at ways of commercialising it by engaging offtakers and investors.  

Invictus says its board, which held a series of meetings in Zimbabwe last month, “received strong interest from multiple domestic institutional investors with the intent of completing a strategic investment into the Company”.

Ben Mbanga, Managing Director of Mangwana Capital, says: “Mangwana Capital is pleased to provide further support to Invictus, and off the back of the discovery at Mukuyu, there is strong demand from local institutional investors to be a part of an exciting opportunity which will have a significant impact on the country.”

The Mangwana fund has Prescribed Asset Status, which makes it attractive to pension funds seeking a home for their investments. Many institutional investors are short of good investment options. With inflation rising, institutions have put 52% of their investments into property, five times higher than the regional average, according to insurance regulator IPEC.

Invictus is currently talking with government to finalise a Petroleum Production Sharing Agreement (PPSA), a major regulatory hurdle.

“The Invictus Board has recently concluded a successful visit to Zimbabwe and met with key government officials following the confirmation of a gas-condensate discovery at Mukuyu to advance the implementation of the Petroleum Production Sharing Agreement, the conclusion of which will deliver a number of corporate and project partnering options for the Company,” says Invictus MD Scott Macmillan.

A production sharing agreement sets out how revenue and output are shared between the government and Invictus, once the project reaches the commercial stage.

Already, Invictus and the government have agreed that government, through the Mutapa sovereign wealth fund, will be granted a 10% back-in-right within six months of a final investment decision being made to go ahead with any commercial development. A back-in-right contract allows the government to take up shares in the operation once a commercial discovery has been made.

Joe Mutizwa, a founding director of Mangwana Capital, told newZWire previously that government could get up to 60% of the output in a production sharing agreement, but this was still under negotiation.

Mangwana Capital is currently chaired by John Terry, former MD of CABS. Apart from resources, it is also invested in agriculture and manufacturing.

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