TIDMKIBO
RNS Number : 0841R
Kibo Energy PLC
25 June 2020
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: 25 June 2020
Kibo Energy PLC ('Kibo' or the 'Company')
Kibo Secures GBP1 Million Funding Facility
Kibo Energy PLC, the multi-asset, Africa focused, energy
company, is pleased to provide a corporate and operational update
and to announce that it has signed a binding term sheet with an
investment consortium consisting of several high net worth entities
and individuals, including two of the Company's largest
shareholders, for up to GBP1,000,000.
OVERVIEW
-- GBP1 million term sheet signed to continue development of
diverse energy project portfolio comprising 1255 MW generation
capacity approaching commercialisation
-- Primary focus on Benga in Mozambique, where it hopes to deliver 350 MW to 400 MW
o On track to finalise a PPA with Baobab at the end of September
2020
o Continued productive engagement with EDM with a Power Purchase
Agreement "PPA" planned to be finalised before the end of 2020
-- Progress in the UK where it is advancing various funding and
commercial opportunities and anticipates bringing Bordesley into
production before the end of 2020
-- Headway in Tanzania, where it is awaiting further guidance
from authorities regarding a new tender for coal fired power
projects
-- Board and management have agreed a 40% pay cut for next three months
Louis Coetzee, CEO of Kibo said: " Following the recent EGM,
some of the of the major shareholders in Kibo entered into
discussions with the Company regarding the projects that Kibo have
within its portfolio and the costs associated with the further
development of these. These discussions delivered strong support
for the Kibo project portfolio and development strategy,
culminating in the funding term sheet set out below.
With the knowledge that we have the support of the majority of
our shareholders, and the strong belief we have in the exciting
potential that our diverse portfolio of energy assets offers, we
are pleased to announce this GBP1m term sheet. This compelling
endorsement from a consortium of highly experienced investors /
existing long-term shareholders, will enable the continued
development of our projects, which are all approaching
commercialisation. In particular, our project in Mozambique is
making vast strides forward, where we realistically expect the
delivery of two PPAs before the end of 2020 for up to 400 MW; at
the start of this year our expectation was for one PPA for 150 MW.
There is a lot of work still to be done, but our team is focused on
delivering on it and we look forward to providing further updates
in due course."
FURTHER INFORMATION
Funding Term Sheet
Kibo has signed a binding term sheet with an investment
consortium consisting of several high net worth entities /
individuals (the "Investors"), for up to GBP1,000,000 (the
"Facility"):
Investment
Secured Convertible Security (the "Convertible Security")
Term
12 months from the date of closing, with an option to roll over
for another 6 months subject to agreeing terms at the time.
Drawdown
The Drawdowns will be over four tranches, consisting of two
GBP300,000 and two GBP200,000 tranches each, provided that the
period in-between drawdowns will be at least 45 days, apart for the
fourth drawdown, unless mutually agreed otherwise. The Company will
provide 7 days' notice if and when it requires to drawdown. The
Company has the option but not the obligation to drawdown on part
or all of the facility provided. First draw-down immediately and
remaining three as stated above and against different operational
milestones agreed between the parties.
Fees
The Company will pay a Facilitation Fee equal to 7% of the Total
Facility to the Investors by issuing new shares in the Company at
the 5-day moving average as on the date of signing of the loan
agreement. Said payment will be subject to and only fall due when
the Company has been able to create sufficient authority to issue
new ordinary shares at the Company's next EGM / AGM.
The Company will pay a Drawdown Fee equal to 15% of the Drawdown
amount to the Investors by issuing new shares in the Company on the
30-day moving average as on the date of each drawdown. Said
payments will be subject to and only fall due when the Company has
been able to create sufficient authority to issue new ordinary
shares at the Company's next EGM / AGM.
Rank
The Convertible Security will rank senior, and will be secured
by a 25% interest in the Company's subsidiary Sloane Investments
Ltd that owns 100% of the Bordersley peaking power project and a
60% interest in Mast Energy Developments LTD.
Buy-Back Option
If the share price closes above 1p for 5 consecutive days, the
Company will have the right to repay the amount still outstanding
on any amount drawn down, at any time with no penalty ("Repayment
Option"). Should the Company exercise its Repayment Right, the
Investor will have the option to convert up to 25% of said amount
still outstanding, at the Conversion Price.
Conversion
The Investor has the option to convert part or all of the
facility provided to the Company, into new ordinary shares of the
Company ("Conversion Shares"), on the Investor giving notice of
conversion to the Company. The conversion price will be based on a
discount to the moving average at the time of the conversion notice
or at floor price of 0.15pence whichever is higher at the time
("Conversion Price").
Orderly Market
The two largest participants in the Facility, who also at
present represent two of the largest shareholders in Kibo, have
agreed not to convert any of their positions in the Facility during
the first six months of the agreed term for the Facility
The Consortium has also agreed that no warrants as provided for
below, will be issued until the end of the agreed term for the
Facility
Warrants
Upon full repayment or full conversion of the convertible loan
facility, the Investor will receive 400 warrants for every GBP1.00
of the facility drawn down and repaid or converted, with each
warrant entitling the holder to acquire one new ordinary share upon
exercise of the warrant . The warrants will be exercisable for 36
months from their date of issue at an exercise price of 0.25p
each.
Additional Austerity Measures
Board and management have agreed to a 40% pay cut for next three
months where after the Company's financial situation will be
reassessed to determine whether measures should be retained, eased,
or removed. The pay cut will be introduced in addition to already
existing austerity measures to mitigate the severe adverse economic
impact of COVID-19.
Operational Focus
During the second half of 2020, the Company will continue to
advance its diverse energy project portfolio comprising 1255 MW
generation capacity approaching commercialisation; these address
the acute power deficits in Sub-Saharan Africa and the UK and will
incorporate sustainable power options.
In Mozambique the primary focus is on securing two PPA's in
aggregate of c. 350MW to 400MW from the following projects:
-- Benga Power Plant Project ('Benga') in Mozambique, in which
it has a 65% interest and is backed by both the Government and the
local energy company Termoeléctrica de Benga S.A. To this end, a
supply agreement is being targeted, which would deliver a total of
c.150 MW to EDM, in line with the Company's commitment to create
reliable, sustainable, and affordable electricity in
Mozambique.
-- As per the announcement dated 18 May 2020, the Company is
also advancing its agreement with Baobab Resources Ltd ('Baobab')
to supply c.200 MW energy to its Tete Steel and Vanadium Project
('TSV Project'). Located approximately 36km away from Benga, the
TSV Project is recognised as a key development project in
Mozambique. In this regard the Company is on schedule to finalize a
PPA with Baobab.
Kibo and Baobab are making excellent progress as they look to
establish the optimal way forward and are on track to finalise a
PPA at the end of September 2020. With a joint project team
established to fast-track this, several additional synergies have
already been identified that may enhance the financial and
technical feasibility of the Baobab project with a material
positive knock-on effect for Benga as well.
Furthermore, the Company continues to have active and productive
engagement with Electricidade de Moçambique ('EDM'), the national
power utility in Mozambique, regarding a PPA. Following the renewal
of the EDM MOU recently, the next major milestone is the completion
of the independent grid integration and impact study, which is
expected to be finalized within the next month. The delivery of
this study will enable the next phase in the ongoing process
towards finalization of a PPA with EDM. Furthermore, EIA work is
progressing in parallel as well as further optimisation of the
feasibility study.
In the UK, as per the announcement dated 26 May 2020, its
subsidiaries, Bordesley Power Ltd ('Bordesley') and Mast Energy
Developments Ltd ('MED'), continue to make good progress. AB
Impianti S.R.L ('AB'), which is managing the end-to-end
Engineering, Procurement, and Construction ('EPC') scope of works
('SoW') for Bordesley, has confirmed that operations are ongoing,
although COVID-19 continues to impact on the ability to resume full
scale operations. Accordingly, the Company remains confident that
Bordesley can still be in production before the end of 2020.
Additionally, the Company is actively progressing various
funding and commercial opportunities to enhance MED's capacity and
ability to significantly expand its project portfolio in
conjunction with an accelerated development plan for an expanded
portfolio. Further details in this regard will be announced to the
market in due course.
Finally, in Tanzania, the fully developed Mbeya Coal to Power
Project ('MCPP') comprising a 39Mt mineable reserve and a 300-600
MW power plant is also making headway. While the Company continues
to explore private and power pool off-take agreements it has also
actively taken all the necessary proactive steps to ensure that it
can participate in any tender process for further coal fired power
projects by the national utility. In this regard the Company is
ready to submit tender documentation on demand.
EGM
The Company furthermore intends to arrange a new EGM to ask for
approval to create more headroom. Formal notice to go out
shortly.
**ENDS**
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
------------------- -------------------- -------------------------
Philip Adler +44 (0) 20 7392 ETX Capital Limited Joint Broker
1494
------------------- -------------------- -------------------------
Bhavesh Patel +44 20 3440 6800 RFC Ambrian Limited NOMAD on AIM
/ Stephen Allen
------------------- -------------------- -------------------------
Charlotte Page +44 (0) 20 7236 St Brides Partners Investor and Media
/ 1177 Ltd Relations Adviser
Beth Melluish
------------------- -------------------- -------------------------
Notes
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 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 UK Reserve Power generation market.
Johannesburg
25 June 2020
Corporate and Designated Adviser
River Group
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END
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