Coastal Africa joins AIM with BP topping up £27m coffers Proactive uses images sourced from Shutterstock
Coastal Africa Group Ltd (AIM:CAGL) arrived to a warm AIM welcome on Wednesday with £27 million of fresh capital, backing from BP PLC (LSE:BP.) and a promise to hunt for oil and gas assets across West Africa.
The newly listed investing company raised £17.4 million from investors at 161p a share, giving it a market value of £218.7 million on admission.
BP Oil International has also agreed to subscribe for £10 million of convertible loan notes. An exclusivity agreement has been signed relating to the offtake and marketing of crude oil and condensate.
Coastal’s plan is familiar to AIM investors in cash shells and SPACs: raise money, identify assets and complete a sizeable acquisition within 18 months, at which point it would flip from investing company to operating business.
The investment case rests heavily on the track record of the management team, where Norwegian financier Conrad Clauson is chief executive and non-executive chairman is Peter Kimpel, a German-born former Goldman Sachs managing director and also ex CFO of Rocket Internet.
Clauson traces Coastal Africa’s roots to 2008, when he became an early investor in Coastal Energy, a shallow-water oil producer in Thailand, and founded Viking Storage Solutions to provide the evacuation infrastructure needed to bring offshore fields into production.
Coastal Energy was eventually acquired by Spain’s CEPSA in 2014 for about C$2.3 billion, delivering an estimated sixfold return on invested equity.
The Coastal Africa board are proposing to combine upstream assets with transport and storage infrastructure to create similar value in West Africa.
Kimpel said the first day of dealings on AIM “marks an important milestone” and that the new funds mean the company “is now well-equipped to capitalise on the opportunities in the region, which continues to present a highly attractive environment for experienced operators capable of partnering constructively with governments, local stakeholders, and industry participants to unlock value from strategically important energy assets”.
In early trading, the shares surged 24% to 200p, according to data on the LSEG website.