One can safely say no-one saw the ASP Isotopes-Renergen deal coming. Not least because Renergen issued no cautionary warning the market that something was brewing. Then, last week, it sprang a fully formed firm intention to merge with the Nasdaq-listed company, which only last month announced plans to list on the JSE later this year.
Talks between ASPI and Renergen have been ongoing for months; according to last week’s Sens statement the two firms – one a play on helium, the other on nuclear technology – struck an agreement on March 31, after which Renergen received an exclusivity payment of $10m from ASPI. (That payment has since been converted into a loan under a $30m bridging finance agreement signed between the two.)
Asked about this lack of warning, Renergen CEO Stefano Marani says it’s because of Renergen’s status as a dual-listed company in South Africa and Australia, and that the company received the go-ahead from the JSE.
“The Australian Stock Exchange does not allow the concept of a cautionary; the only thing that you can do there is put your stock into a trading halt, and you can’t put your stock into a trading halt on the ASX for more than 48 hours.”
If your shares are suspended for longer than that, he says, then you’re in breach of the listings rules. “And by Australian law, you’re then forced to disclose 100% of the information of the transaction that you’re working on, whether it’s finalised and approved yet or not.”
The JSE’s director of issuer regulation, Andre Visser, meanwhile, says that in terms of JSE listings requirements, a cautionary is only required if information is price sensitive and confidentiality “cannot be maintained”.
When pushed about the dual-listing issue, he tells Currency that the requirements of the primary stock exchange take precedence. In this case, for Renergen, that’s the JSE. But, he says, “some markets don’t have the concept of a cautionary. So it’s not a waiver, rather just a practical approach of one exchange’s requirements taking precedence.”
Visser also put Currency onto the Takeover Regulation Panel given that the deal between Renergen and ASPI is a scheme of arrangement – where Renergen shareholders will receive 0.09196 “consideration shares” for every one Renergen share owned.
When contacted, deputy executive director Zano Nduli said: “The panel does not comment on transactions that are active subjects of its regulatory mandate.”
A company ‘without equal’
So what is the deal all about? After all, it’s had a galvanising effect on Renergen shares, which closed the week at R11.54 from their pre-announcement price of R6.66. The deal ratio was struck at an effective 41% premium to where Renergen shares had traded for the 30 days before the announcement was made.
Officially, the line is that the business combination will create a company “without equal” in the supply of critical and strategically important materials vital to the health-care, semiconductor manufacturing and energy sectors.
ASPI argues that isotopes have “one of the most severely compromised supply chains in the world”, controlled by Russia’s Rosatom and two small European producers.
China’s recent export restrictions on critical materials have “exposed significant vulnerabilities in global supply chains, with Western and other governments recognising the key importance of securing access to critical materials and other strategic resources that are increasingly necessary to maintain economic and military strength”.
Marani says both companies will be able to wring “significant operational efficiencies” by virtue of the fact that they’re both selling “to the exact same customer base”.
“Your processes are intertwined. It’s like a hand-and-glove fit. It really is.”
It also means Renergen will now more than likely have the cash it didn’t before to complete phase 1 and 2 of its Virginia gas plant in the Free State.
“We’ve got a stronger balance sheet,” ASPI CEO Paul Mann tells Currency. “We’ve got a lot of US investors, and we can raise capital very easily.”
Without this cash Renergen “faces significant liquidity concerns”; if the deal with ASPI – itself only listed on Nasdaq since 2022 – doesn’t go ahead, it will more than likely need to undertake a capital raise. It’s one reason Renergen has lost so much favour with the market. That, and delays to the commissioning of its liquefied natural gas and helium plants have seen the stock slump from a high of R42.70 in April 2022. Its losses, meanwhile, have mounted, hitting R247m for the year ended February 2025.
“If the merger doesn’t go through for any reason – I think it will, but if it doesn’t – then there will have to be a rights issue I’m guessing at a pretty horrible price,” says Mann.
As for phase 2, by which time Renergen will likely be part of ASPI, Marani says Renergen has “a few attractive options on the table”.
One such option is having the companies’ customers pay for their plants. Hence the deal that ASPI inked in October last year with TerraPower, the nuclear power company backed by Bill Gates, where TerraPower will bankroll ASPI’s high-assay low-enriched uranium facility, and purchase the uranium too.
‘Better off together’
Renergen has long wanted a US listing, arguing that access to American pools of capital would be a “game changer” for the company. And the merger, say Mann and Marani, also fits in squarely with the kind of US-South Africa trade proposals that South Africa’s delegation to Washington has made, as part of its rapprochement with Donald Trump’s administration.
Asked how the two companies found each other, Mann says he met Marani about four years ago when the Renergen founder came to visit ASPI’s Pelindaba plants.
“We’ve just stayed in contact since. And it became pretty obvious during the back end of last year that the companies were better off together than separate,” he says.
Renergen has so far received irrevocable commitments from investors holding 35.86% of its stock, including shares owned by Marani and executive director Nick Mitchell, Mazi Asset Management, Anchor Capital and Ivy Asset Management.
And the deal is also key to ASPI’s decision to list on the JSE this year – likely in the next four months. “We would have had a JSE listing anyway, but it wouldn’t have been so urgent to do it if we weren’t doing this transaction,” says Mann.
ASPI shares closed at $8.59 on Friday, marking a gain of almost 62% in the past month.
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