TIDMKIBO
RNS Number : 8851R
Kibo Energy PLC
05 March 2019
Kibo Energy PLC (Incorporated in Ireland)
(Registration Number: 451931)
(External registration number: 2011/007371/10)
Share code on the JSE Limited: KBO
Share code on the AIM: KIBO
ISIN: IE00B97C0C31
("Kibo" or "the Company")
Dated: 05 March 2019
Kibo Energy PLC ('Kibo' or the 'Company')
Conversion of Sanderson Minority Interest in Mbeya Development
to Kibo Shares & Continuation of Forward Payment Facility
Kibo Energy PLC ("Kibo" or the "Company"), the multi-asset,
Africa focused, energy company, is pleased to announce that it has
today signed a binding Term Sheet with Sanderson Capital Partners
("Sanderson") for the conversion of Sanderson's 2.5% equity
interest in the Company's 100% owned Tanzanian subsidiary, Mbeya
Development Company Limited ("Mbeya Development") to ordinary
shares in Kibo (the "Conversion").
Mbeya Development is the holder of the Company's physical
120.8Mt Coal Resource (see RNS dated 11 April 2016) in Tanzania
under Mbeya Coal LTD as well as the power project under Mbeya Power
LTD. Kibo is continuing its clarification enquiries regarding the
TANESCO decision referred to in the 14 February 2019 RNS. In
parallel the Company is also continuing to pursue other commercial
opportunities for the Mbeya Coal to Power Project ("MCPP"),
previously identified during the development of the MCPP which now
present very attractive options given the advanced development
status of the MCPP. These include amongst others the possibility to
develop the MCPP as a dedicated facility for the power export
market and / or local private market.
Conversion of Sanderson's 2.5% Interest in Mbeya Development
-- Kibo will issue 126,436,782 new Ordinary Shares of par value
EUR0.015 (the "Conversion Shares") to Sanderson in conversion of
its 2.5% minority interest in Mbeya Development. The amount of
Conversion Shares is calculated on the basis of a valuation of GBP
66 million for 100% of the Mbeya Coal Resource based on the
weighted average total of the estimated market value of Mbeya
Development's Coal Resource held under Mbeya Coal LTD and the net
present value of the proposed Coal Mine based on a 1.5 million ton
per annum production figure as determined in the definitive mining
feasibility study for the Mbeya Coal Mine . The Conversion Shares
have been calculated based on a Kibo share price of GBP0.013050
(being EUR0.015 at a GBP:EUR exchange rate of 1.1494). The
underlying carrying value of Mbeya Development has been capitalised
as an intangible asset at consolidated group level amounting to
GBP15,896,105 as at 31 December 2017, as per Kibo's latest
available audited group consolidated accounts.
-- Sanderson will be entitled to a 0.3% royalty of the future
operating profits of the proposed Mbeya Coal Mine should it go into
production. This royalty is capped at a maximum of GBP 2 million
and an annual production of 1.5million tonnes per annum over a mine
life of 25 years.
-- Sanderson will retain no claim of whatever nature in the equity of Mbeya Development.
-- Sanderson will have the option to appoint one representative
to the Board of Kibo as a non-executive director, conditional on
the appointee being acceptable to Kibo and meeting all other
regulatory requirements for appointment, and only for as long as
Sanderson holds a direct interest of more than 20% of Kibo's issued
share capital. Should Sanderson's interest fall below this
threshold, Kibo will have the option to remove the Sanderson
appointee from its Board. The details of the service contract of
any proposed director would be released at the time a Sanderson
representative is appointed.
-- Sanderson will notify Kibo in writing, five days in advance
of any intention to sell, loan or otherwise dispose of any of its
shares held in Kibo and acquired under binding Term Sheet, together
with the amount it wishes to dispose of and the price per share it
is asking. This is to allow Kibo's brokers the option to procure
the placing of such shares at the relevant price and so ensure an
orderly trading in the Company's shares.
Continuation of Forward Payment Facility
The Term Sheet also provides for the continuation of Kibo's USD
2,940,000 Forward Payment Facility (the "Facility") signed between
Kibo and Sanderson, the full details of which are contained on the
Company's RNS dated 21 December 2016 and which remains available
under the same terms and conditions save for points covered below.
The facility is currently undrawn with the previously outstanding
balance having been settled in full in July 2018 (see RNS dated 9
July 2018).
The Facility will be available for a first immediate draw by
Kibo, amounting to GBP100,000 and a second draw on or any time
before 15 March 2019 amounting to no more than GBP400,000. Any
additional draw-downs of the balance of the USD 2,940,000 limit are
to be agreed between Kibo and Sanderson on a case by case basis,
and all draw-down amounts will be subject to a facilitation and
implementation fee of GBP5,000 per GBP100,000 drawn down. Kibo is
not obliged to draw down any of the Facility and the initial fee
payment of USD732,036 of ordinary shares in Kibo, made to Sanderson
under the original Facility arrangement, was a one-off payment and
is not required to be paid again.
Discussion
This Conversion is welcomed by the Company as it provides
validation of what it believes is an attractive investment
opportunity provided by its energy assets across Africa and the UK.
Sanderson has been a long and stable supporter of Kibo from an
early stage and now with a significant shareholding and the option
for board representation, Sanderson is expected to bring enhanced
funding capability to the Company both internally and from its
financial business network. We are also encouraged by Sanderson's
willingness to include an orderly market-style provision in the
agreement, which Kibo believes is a vote of confidence in the
future prospects of our asset portfolio. Further, should Sanderson
elect to exercise its option to appoint a director to the Kibo
Board the effect would be to bind it to compliance with the
Company's share dealing code, imposing strict share trading
controls on it, in addition to the aforementioned orderly market
arrangement.
The continuation of the Facility also provides the Company with
the option of short-term funding as necessary within the Facility
limit to enable it to maintain momentum behind its on-going
development work across its African and UK projects while also
examining a range of additional funding options for the
Company.
Application will be made for the Conversion Shares to be
admitted to trading on AIM and the JSE AltX markets. Trading in the
Conversion Shares is expected to commence on AIM and the JSE on or
around 11 March 2019 ('Admission'). Following Admission, the
Company will have 766,467,851 shares in issue. This figure may be
used by shareholders as the denominator for calculations to
determine if they are required to notify their interest in, or a
change to their interest in, the Company under the FCA's Disclosure
Guidance and Transparency Rules.
Following the settlement, Sanderson's shareholding in the
Company will increase from 52,764,905 to 179,201,687 ordinary
shares representing an increase in interest from 8.24% to 23.38% in
the Company. This will result in Sanderson becoming a related party
of Kibo for the purposes of the AIM Rules for Companies. The
interest in the Company of Kibo's other significant shareholder,
Sechaba Natural Resources Limited, will decrease from 22.07% to
18.43% on an unchanged holding of 141,260,030 ordinary shares.
Louis Coetzee, CEO of Kibo, said: "We are very pleased with the
agreement reached with Sanderson to convert its underlying interest
in Mbeya Development into Kibo PLC shares. Sanderson will now
become a true cornerstone institutional investor in Kibo and we are
optimistic that Sanderson will also defend its shareholding
position in future bringing further stability to the Company's
ongoing funding position. We also see this as a strong signal to
the market of Sanderson's confidence in Kibo's project portfolio
which continues to advance on multiple fronts as we seek to address
the critical requirement for energy security in sub-Saharan Africa
by becoming a leading regional power producer."
**S**
This announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014 ("MAR").
For further information please visit www.kibo.energy or
contact:
Louis Coetzee info@kibo.energy Kibo Energy PLC Chief Executive Officer
Andreas Lianos +27 (0) 83 4408365 River Group Corporate and Designated
Adviser on JSE
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Ben Tadd / +44 (0) 20 3700 SVS Securities Limited Joint Broker
Tom Curran 0093
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Jason Robertson +44 (0) 20 7374 First Equity Limited Joint Broker
2212
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Andrew Thomson +61 8 9480 2500 RFC Ambrian Limited NOMAD on AIM
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Isabel de Salis/ +44 (0) 20 7236 St Brides Partners Investor and Media
Gaby Jenner 1177 Ltd Relations Adviser
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Notes to editors
Kibo Energy PLC is a multi-asset, Africa focused, energy company
positioned to address the acute power deficit, which is one of the
primary impediments to economic development in Sub-Saharan Africa.
To this end, it is the Company's objective to become a leading
independent power producer in the region.
Kibo is simultaneously developing three similar coal-fuelled
power projects: the Mbeya Coal to Power Project ('MCPP') in
Tanzania; the Mabesekwa Coal Independent Power Project ('MCIPP') in
Botswana; and the Benga Independent Power Project ('BIPP') in
Mozambique. By developing these projects in parallel, the Company
intends to leverage considerable economies of scale and timing in
respect of strategic partnerships, procurement, equipment, human
capital, execution capability / capacity and project finance.
Additionally, the Company will benefit from its robust and
experienced international blue-chip partnership network across its
project portfolio, which includes: SEPCO III (China), General
Electric (USA); Tractebel Engineering (Belgium); Minxcon Consulting
(South Africa); ABSA / Barclays Africa; and Hogan Lovells
International LLP.
Additionally, the Company has a 60% interest in MAST Energy
Developments Limited ('MED'), a private UK registered company
targeting the development and operation of flexible power plants to
service the Reserve Power generation market.
Johannesburg
05 March 2019
Corporate and Designated Adviser
River Group
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END
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