(Business in Cameroon) - London-based investment firm YF Finance pumps an additional £5.85 million ($7.7 million) in the equity of AIM-quoted Victoria Oil and Gas (VOG), the parent company of Gas du Cameroon.
If approved, this investment will enable YF Finance which is already VOG’s largest shareholder (6.5%) to increase shares. As a reminder, the operation falls in line with a strategy to raise equity through the issue of new shares that saw the company mobilize, in aggregate, £13.6 million ($17.7 million).
The entire sum will be used to strengthen cash flow since VOG faced difficulties throughout 2018; difficulties mainly caused by the suspension of contract with Cameroon’s power utility Eneo. Also, VOG had to restructure debt to maintain liquidity.
The equity increase is another good news for the company which resumed contract with Eneo in late 2018. However the company planned a number of measures to limit spending. These include a reduction by 53% in the salaries of senior executives, -50% for the Board Chairman and -33% for the Managing Director. According to its yet to be audited books, VOG ended 2018 with a turnover of $10.6 million, 50% down that of 2017. $3.6 million cash flow was far below the $11.4 million in 2017 and net debt was $17.3 million.
Meanwhile, the company will pursue the development of its projects in Cameroon, especially the Matanda project.