South African gas startup targets dual listing in New York and Johannesburg

South African Gas startup, Bluedrop Energy says it plans to list its shares on the NYSE in New York, and the Johannesburg Stock Exchange (JSE).

Bluedrop will first float its shares on the NYSE in 2022, while its JSE listing will follow at a date still to be announced, it said.

In April this year, Bluedrop announced that it has secured a $20 million (R300 million) funding from J. Sassoon Group, a US, Washington DC-based private equity and investment firm for the construction of Bluedrop’s modern state of the art Smart Composite LPG Cylinder manufacturing plant.

Export-Import Bank of the US has also issued a letter of interest providing a $36 million (R497 million) finance guarantee in support of J Sassoon Group for this project, the group said.

In June, J. Sassoon Group signed a Technical Services Agreement (TSA) with the South African office of a US-based multinational engineering firm, Fluor Corporation, for the development of Bluedrop’s smart composite LPG cylinder manufacturing plant.

J. Sassoon Group chairman, David Sassoon said: “The South African market is in desperate need of foreign capital infusion and this potential floating of Bluedrop’s shares in New York is going to help Bluedrop grow exponentially through asset acquisitions making it one of the leading LPG wholesalers and composite LPG cylinder manufacturers in Africa.

“Unfortunately, there has been a drought of investments in South Africa’s capital market, forcing startups like Bluedrop to seek funding from foreign markets. These are opportunities that should be available for local entrepreneurs and investors; unfortunately, these opportunities end up being transferred to markets like New York and London.”

He called for the government to re-energise local markets by offering incentives to local investors to unleash local capital, which will encourage foreign investors to invest in South Africa and reduce risk exposure to foreign investors.

“Otherwise, local capital will continue to flow to foreign markets, which makes firms such as ours to have incentives to co-invest with local partners. Co-investment goes beyond just capital, co-investing with local partners allows for the creation of an intellectual highway of ideas, and unlocks more opportunities, all of which fosters cooperation and helps local economies grow exponentially.”

Sassoon expects to help raise up to $100 million (R1.4 billion) in private placement funding for Bluedrop’s second round of funding for its pre-IPO campaign, before its shares float on the NYSE.

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South African gas startup targets dual listing in New York and Johannesburg