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Camac Energy to list in S.Africa after pension-fund rescue

Source: Reuters - Fri, 14 Feb 2014 16:14 GMT
Author: Reuters
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JOHANNESBURG, Feb 14 (Reuters) - U.S. oil firm Camac Energy said on Friday it planned to list in Johannesburg, just months after the Africa-focused company was thrown a $270 million lifeline by South Africa's state pension fund.

The Public Investment Corporation (PIC), which manages 1.4 trillion rand ($127 billion) of South African government employee retirement funds, agreed in November to buy a stake in Camac, days after the Houston-based firm warned it could go bankrupt, filings show.

Camac, which explores for oil and gas in Nigeria, Kenya and Gambia, has said the PIC investment would fund the purchase of the remaining 60 percent it does not already own in Nigeria's Oyo oil field.

Camac's share price has risen nearly 60 percent since the PIC investment, valuing it at $245 million - below the pension fund's purchase price of $270 million for 30 percent.

The company - which is not covered by analysts according to Thomson Reuters data - warned investors it required additional finance to stay in business just a week before the PIC deal was announced, saying its debt outweighed assets by $13.4 million.

"Internal cash flow models do not forecast enough operating cash flows to fund operations and pay outstanding liabilities for the next 12 months," it said in its July-September earnings filing with the U.S. Securities and Exchange Commission.

"These factors raise substantial doubt about the company's ability to continue as a going concern."

Camac Chief Executive and chairman Kase Lawal, a 58-year-old Nigerian with U.S. citizenship, holds 57 percent of the company according to its filing.

Prior to the recent deal the PIC had expressed concerns about investing in businesses controlled by a few individuals, citing that in December as a reason for opposing a Chilean takeover of a local drug firm.

"Given our experience of corporate governance challenges with some family-controlled businesses locally, we believe this introduces risks to the investment," it said at the time.

The PIC and Camac Energy did not respond to questions from Reuters.

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