Chariot shares soar as investors cheer funding and spin-out plan

Chariot shares soar as investors cheer funding and spin-out plan

It is not that uncommon to find small caps with parts that are worth more than the sum.

But, it is rarer to see management teams get on the front foot to successfully unlock these discounted valuations.

There are, of course, different reasons such discounts exist. Most come down to one of two factors: access to capital or execution risk. In other words, does the company have the money, and do they actually have the ability?

Another relates to the challenges that come with multitasking whilst under-funded. It can be too easy to prioritise one opportunity over the other.

Solution found

With new funding and a new strategic plan, AIM-quoted Chariot Ltd appears to have found a solution that pleases the market.

Chariot Ltd (AIM:CHAR, OTC:OIGLF) shares are up 17% on Tuesday, trading up as high as 1.73p, as shares resumed trading following Friday’s after-market close announcement that it had raised $5.5 million and it planned to demerge its renewable energy business.

The equity raise sees new shares being priced at 1.4p, the same price as Friday’s close.

Chief executive Adonis Pouroulis highlighted that each of Chariot’s two business segments has seen significant developments in recent months that have “led to material shifts” in the investment cases and business profiles.

More specifically, the firm has taken full operatorship of its Moroccan oil and gas assets, and,  following a somewhat disappointing recent well, the plan is to ‘rescope’ and ‘rescale’ the Anchois gas field development, and then advance it to production.

Funding package

At the same time, the company’s renewable power subsidiary Etana Energy secured a US$175m financing package that promises to open up its opportunity in South Africa.

This financing “has transformed from just a concept in 2022 to a fully-funded, bankable and creditworthy entity,” Pouroulis said on Friday.

The Chariot boss added:

Along with our pipeline of generation assets in our renewable power business, this has scalable growth potential, and with the support from major financing institutions, there is now tangible value attributed to it,

Upstream and power

He, says:

Both our upstream and power divisions now have their own momentum with different business plans, and our strategy has therefore evolved to reflect this new reality.

“The value we see in these two pillars is currently not recognised within the combined group structure”.

Investors will be keen to see the Chariot’s AIM-quoted shares find impetus, before an EGM is called to split the company.

The next FTSE index review will be announced on Wednesday, based on market closing prices on Tuesday.

No changes are expected for FTSE 100 this quarter, as all constituents of the blue-chip benchmark rank above the relegation threshold – in other words, none of the 100 largest qualified companies on the London Stock Exchange have fallen below 110th place in terms of market cap, and none from the FTSE 250 have climbed into the top 90 or above. 

Four companies are likely to be promoted from the small cap ranks into the FTSE 250, though: telecoms group Gamma Communications (AIM:GAMA), police and military helmet maker Avon Technologies PLC (LSE:AVON), home improvement retailer Wickes Group PLC (LSE:WIX), and Pantheon Infrastructure PLC (LSE:PINT).

Several mid caps stocks are are risk of dropping out of the FTSE 350 to make way, including National Express owner Mobico Group PLC (LSE:MCG), MyProtein shakes maker THG PLC (LSE:THG), and Ukrainian iron ore producer Ferrexpo PLC (LSE:FXPO, based on current market capitalisations.

The index changes will become effective on Monday 23 June 2025.

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