Business
Tanzania oil firm to raise capital from local investors
The remaining 10 percent is held by Swala Oil and Gas in trust for the local community in areas that the company operates in.
“For us, it’s also a way of trying to get local investors and communities involved in the project from the start, which will ensure they are able to reap maximum benefits from the resources in the area,” said Mr Ridge.
The involvement of local investors and communities has always been a hot political and economic issue with local communities complaining they do not benefit enough from mining operations, an issue the firm says the placement will help address.
“It is the intention of this offer to encourage Tanzanian investment in a Tanzanian oil and gas company, and the company’s parent, Swala Energy Ltd Australia, will therefore not participate in the offer until the Tanzanian and East African applicants have been satisfied,” reads the company’s information memorandum.
“It is the intention of the sponsors to have the shares of the company eventually traded through the Enterprise Growth market of the Dar es Salaam Stock Exchange. However, at this stage shares may be traded through an over-the-counter market,” the memorandum stated.
But even as the company looks to tap funds from regional investors, the issue of liquidity is still a concern, given that the over the counter market remains poorly developed regionally.
This means it would be difficult for investors to realise their investment in the company, compared with listed firms.
