US oil firm Camac Energy said 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 Energy has oil exploration rights to four Kenyan blocks. Blocks L1B and L16 are onshore while L27 and L28 are offshore in the Lamu Basin.
Camac, which also explores for oil and gas in Nigeria and Gambia, has said the PIC investment would fund the purchase of the remaining 60 per cent it does not already own in Nigeria’s Oyo oil field.
Camac’s share price has risen nearly 60 per cent since the PIC investment, valuing it at $245 million—below the pension fund’s purchase price of $270 million for 30 per cent.
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 US Securities and Exchange Commission.
“These factors raise substantial doubt about the company’s ability to continue as a going concern.”
Last month Camac said it had conducted seismic surveys on its Kenyan exploration blocks, whose results would be used to identify the best drilling spots.
“Camac successfully carried out aero-magnetic and gravity survey of our onshore blocks L1B and L16 in Kenya last year and we plan to carry out 3D seismic surveys on our two offshore deep water L27 and L28 blocks in 2014,” said chief executive Kase Lawal said.
READ: US firm steps up exploration on Kenyan coast
Camac chief executive and chairman Kase Lawal, a 58-year-old Nigerian with US citizenship, holds 57 per cent 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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