TIDMKIBO
RNS Number : 7171V
Kibo Energy PLC
11 April 2023
Kibo Energy PLC (Incorporated in Ireland)
(Registration Number: 451931)
(External registration number: 2011/007371/10)
LEI code: 635400WTCRIZB6TVGZ23
Share code on the JSE Limited: KBO
Share code on the AIM: KIBO
ISIN: IE00B97C0C31
('Kibo' or 'the Company')
Dated: 7am 11 April 2023
Kibo Energy PLC ('Kibo' or the 'Company')
Warrant Repricing, Convertible Loan Note Conversion and
Reprofiling of Investor Loan
Kibo Energy PLC (AIM: KIBO; AltX: KBO), the renewable
energy-focused development company, announces that following
extensive stakeholder engagement the Company has decided and agreed
upon several measures to ensure the Company's financial and
operational stability and to secure the continuation of the
Company's development plans as outlined in its operational update
RNS dated 6 April 2023.
These measures comprise the following three elements designed to
ensure the Company has further capital injections, to reduce its
immediate liabilities to improve the balance sheet and to
incentivise the Company's investors for longer-term returns:
-- Warrant Repricing - the repricing of all the Company's
1,128,024,625 unexercised warrants currently in issue and linked
with new incentive warrants, to be issued to warrant holders on
exercising their current Kibo warrants.
-- Convertible Loan Notes Conversion - the conversion of the
Company's 7% Convertible Loan Note Instrument issued on 7 January
2022, which has a current value (including interest) of GBP714,517,
to new ordinary Kibo shares of EUR0.001 par value each at a price
of 0.14 pence per share.
-- Bridge Loan Re-Profiling to amend it to a 24-month term loan
- the reprofiling of the Company's existing bridge loan facility as
announced in an RNS dated 16 February 2022, with a current balance
of GBP1,182,254 and currently due for payment on 28 April 2023.
As previously announced (RNSs dated 1 February 2023 and 6 April
2023), a key component of the Company's strategy is the proposed
spin-out of a new company, Ultimate Sustainable Energy ('USE'), to
be listed on the AIM Market ('AIM') of the London Stock Exchange
('LSE') via an initial public offering ('IPO'). It is envisioned
that USE will contain the Company's existing waste-to-energy
('WtE') and biofuel project portfolio and the Company will provide
the updated timing for the proposed IPO in the general update
referenced above.
The Board expects that the measures summarised above, and
outlined in detail below, will, assist with the funding required
for the spin-out while incentivising existing long-term
shareholders, warrant holders and other stakeholders in having
their interests aligned with the Company's business development
goals across its entire project portfolio that spans reserve power,
waste to energy, biofuel and long duration energy storage ('LDES').
(For an overview of the Kibo strategy and project portfolio, the
latest Company Corporate Presentation can be accessed on the
Company website at www.kibo.energy ).
The agreement of current and former directors and management of
the Company to convert Loan Notes of GBP714,517 owed under the 7%
Convertible Loan Note Instrument, not only demonstrates their
personal support of Kibo's project portfolio and business strategy
but also significantly contributes towards deleveraging the
Company's balance sheet. Similarly, the agreement of the
Institutional Investor to reprofile its bridge loan facility
further supports the development of the Company's operations and
execution of its business strategy , while allowing the Company to
preserve much-needed capital for the further development of the
Company's existing project portfolio. Further details on the
measures being announced today are outlined below.
A. Warrant Repricing
All unexercised and outstanding warrants in the Company to the
amount of 1,128,024,625 will be repriced (the 'Repriced Warrants')
such that they will all be exercisable at GBP0.001 (0.1p.) The
summary details of outstanding Kibo warrants are shown in Table 1
below.
Warrant Number of Warrants Expiry Date Current Exercise New Exercise
Instrument outstanding and unexpired Price Price (Repriced)
Reference
W.I 3 313,750,000 22 Sept 2023 0.4p 0.1p
--------------------------- ------------- ----------------- ------------------
W.I 5 216,000,000 22 Sept 2023 0.25p 0.1p
--------------------------- ------------- ----------------- ------------------
W.I 6 430,000,000 7 Nov 2023 0.4p 0.1p
--------------------------- ------------- ----------------- ------------------
W.I.7 168,274,625* 16 Feb 2025 0.231764p 0.1p
--------------------------- ------------- ----------------- ------------------
TOTAL 1,128,024,625
--------------------------- ------------- ----------------- ------------------
*All warrants held by institutional investor - see 'C. Institutional
Investor Loan' below
Table 1: Summary of outstanding Kibo warrants
Each Repriced Warrant will permit the holders (the 'Warrant
Holders') to subscribe for one ordinary Kibo share of EUR0.001 par
value at the new exercise price of 0.1p on or before the expiry
dates, which will remain unchanged.
The Company will also issue incentive warrants (the 'Incentive
Warrants') to all Warrant Holders who exercise their current
warrants by 30 June 2023 following the repricing as well as to
those Warrant Holders who have already exercised warrants under the
Warrant Instruments mentioned above. One Incentive Warrant will be
issued for each current warrant exercised, at an exercise price of
0.25p with the following terms:
-- Each Incentive Warrant will be exercisable for an 18-month
period, commencing on the date it is granted.
-- Rights to exercise the Incentive Warrants will vest six (6) months from the grant date.
-- Granting of Incentive Warrants will be conditional on the
Company obtaining necessary authorisations at a General
Meeting.
-- Incentive Warrants may only be exercised by warrant holders
pro-rata to the number of Kibo shares that they continue to hold at
the time that they elect to exercise the Incentive Warrants. For
example, if a warrant holder exercises 100 warrants resulting in
100 new Kibo shares being issued, they will receive 100 Incentive
Warrants. If a warrant holder holds 50 warrants at the time the
warrant holder exercises their Incentive Warrant, only 50 warrants
will be exercisable and the balance will lapse.
A total of up to 1,200,774,625 Incentive Warrants may be issued
by the Company.
B. Conversion of 7% Convertible Loan Note Redeemable
Instrument
The Company has reached agreement with the holders (the
'Noteholders') of the Company's 7% Convertible Loan Note Instrument
dated 7 January 2022 (the 'Loan Notes'), to convert all principal
amounts and accrued interest to ordinary Kibo shares of EUR0.001
par value. The total amount outstanding, including accrued interest
on the Loan Notes, will be GBP714,517 at the time of conversion and
this amount will be converted at a price of 0.14p (the 'Conversion
Price'), resulting in the issue of 510,369,286 new Kibo shares to
the Noteholders (the "Noteholder Shares"). The Conversion Price is
the same as the most recent price at which the Company issued
shares (refer to Company RNS dated 25 January 2023), as is required
under the terms and conditions of the Loan Note Instrument. It is
noted that the Noteholders comprise directors, former directors and
management of the Company who had recently agreed to an extension
of the redemption date of the Loan Notes to 31 May 2023 (RNS dated
1 March 2023). As outlined above, these Notes will now be redeemed
by conversion to Kibo ordinary shares.
The Noteholders will be granted warrants equal to 50% of the CLN
Balance (i.e. GBP357,258.50) divided by the Reference Price
exercisable at EUR0.0015 per Ordinary Share of the Company, with a
36 month term. The warrants will only vest as exercisable once the
Outstanding Balance of the below referred Term Loan Facility (as
defined below) is less than 50% as at the Execution Date.
C. Re-profiling of Institutional Investor Bridge Loan
Facility
The Company has further agreed to a reprofiling of its existing
bridge loan facility into a new 24-month term loan (the 'Term Loan
Facility'). The Term Loan Facility will extend the current
repayment date (which is 28 April 2023 per the RNS dated 11 January
2023). Under the Term Loan Facility agreement, GBP1,113,980 (the
'Reprofiled Amount') of the total amount owed under the Facility of
GBP1,182,254 (the 'Outstanding Balance'), will be deemed a First
Tranche Drawdown advanced to the Company on the first trading day
following the completion of the following conditions precedent:
1. Kibo's 7% Convertible Loan Note Instruments are converted to
Kibo shares in the amount and conversion price as outlined above,
resulting in the issue of 510,369,286 new Kibo shares to
Noteholders.
2. The Warrant Holders exercise up to 264,125,000 of the
1,128,024,625 Kibo warrants outstanding at the repriced exercise
price of 0.1p, resulting in cash proceeds of GBP264,125 to the
Company and the issue of up to 264,125,000 new Kibo shares to the
Warrant Holders.
3. Following completion of (1) and (2) above, the Institutional
Investor exercises 168,274,625 warrants (W.I 7 in Table 1 above),
resulting in cash proceeds of GBP100,000 to the Company, and
GBP68,274 as a reduction against the amount due to be owed under
the Term Loan Facility.
As part of this original bridge loan agreement, the Company
provided the Institutional Investor with security in the form of
shares held by it in Mast Energy Developments Plc ("MAST") in the
amount of 54,054,055 shares. This arrangement has been cancelled as
part of the reprofiling.
The terms of repayment of the Reprofiled Amount and any
additional drawdowns under the reprofiling agreement of the
Facility, comprise the following:
-- The Reprofiled Amount will be subject to a six-month
principal repayment holiday, followed by 18 equal monthly cash
repayments of principal and the coupon thereafter on the maturity
date unless otherwise capitalised under the terms of the reprofiled
Facility, which falls 24 months from the Drawdown Date. It is noted
that that the First Drawdown is the Reprofiled Amount, and the
Drawdown Date is the first trading day following satisfaction of
the condition's precedent outlined above. Further drawdown amounts
and drawdown dates will be the subject of mutual agreement between
the Investor and the Company for the duration of the Commitment
Period (defined as three (3) years from the Execution Date of the
loan reprofile agreement).
-- If the Company elects not to settle a monthly payment (each
being a "Missed Payment"), they will automatically grant a right
for the monthly payment to be settled in shares as per the Non-Cash
Repayment Terms, being that the Investor will be granted
subscription rights over such balances due with respect to the
Missed Repayment. The Investor will have the right for 12-months to
capitalise such amounts of the Missed Payment from time to time
with respect in varying amounts and without any restrictions at an
8% discount to the average of the 1 daily VWAP chosen by the
Investor in the 10 trading days preceding each relevant
subscription notice ("Adjusted Placing Price").
-- The Company will grant senior fixed and floating security
over its assets, including the shareholdings of MAST and USE as
held by the Company. The Company will subordinate the loan between
the Company and MAST (refer RNS dated 15 December 2022) to the
funding of the Investor to MAST.
-- The Reprofiled Amount will be subject to a 9.5% fixed coupon
per 12 months of the 24-month term for each drawdown (i.e., 19%
aggregate coupon). Each coupon is calculated at the commencement of
a 12-month period based on the gross outstanding balances. The
coupon will be paid at the end of the Term unless otherwise
capitalised into shares of the Company under the terms of the Term
Loan Facility but accrues on the Execution Date, with respect to
the first 12 months and on the first anniversary for the second 12
months.
-- An Implementation Fee of 5% of the First Tranche (i.e., the
Reprofiled Amount) is added to the balance payable at the end of
the Term, unless otherwise capitalised under the terms of the
reprofiled Facility, but accrues on the Execution Date and an
additional 5% of each relevant drawdown (to be deducted from gross
proceeds).
-- If the Company fails to pay any sum on the due date for
payment certain default terms, including additional fees and
conversion of outstanding amounts, would then apply.
The Institutional Investor shall receive Warrants equal to 100%
of each Drawdown divided by the Reference Price. With respect to
the Drawdown for the Reprofiled Amount, being GBP0.001 per Share
and, with respect to any further Drawdown, being the average of the
5 daily volume weight average prices prior to the Drawdown Date.
Half of the warrants will be exercisable at the relevant Reference
Price and the other half will be exercisable at 200% of the
relevant Reference Price. The exercise period will be as
follows:
-- 36 months if the outstanding balance is settled in full
within 12 months of the date of Term Loan Facility agreement;
and
-- 48-month term from the date of issuance if the outstanding
balance is not settled in full within 12 months of the date of Term
Loan Facility agreement.
The exercise of the warrants may be offset against outstanding
debt pursuant to the Term Loan Facility.
Implementation of the measures outlined in A to C above is
expected to result in the newly issued share capital being
3,995,991,683*. The number of shares and warrants held by the
directors of the Company and their related parties before and after
the conversion of the Loan Notes is shown in Table 2 below.
*assuming 264,125,000 shares issued pursuant to exercises of
Warrants excluding the Institutional Investor and 168,274,625
shares issued pursuant to exercises of Warrants by the
Institutional Investor.
Before Loan Notes Conversion After Loan Notes Conversion
Director Number Number Shares held Number Number Number Shares
Name of Kibo of Kibo as % of of shares of Kibo of Kibo held as
shares warrants current acquired shares warrants % of issued
held held issued share as result held held share capital
capital of conversion after all
(3,053,222,772 of 7% measures
shares) Convertible implemented
Loan Note (3,995,991,683
Instruments shares)
----------- ---------- --------------- --------------- ------------ ---------- ----------------
Louis Coetzee
& Related
Parties 19,505,996 None 0.64% 199,875,715 219,381,711 None 5.49%
----------- ---------- --------------- --------------- ------------ ---------- ----------------
Noel O'Keeffe
& Related
Parties 7,037,047 None 0.23% 50,197,857 57,234,904 None 1.43%
----------- ---------- --------------- --------------- ------------ ---------- ----------------
Chris Schutte None None n/a None n/a None n/a
& Related
Parties
----------- ---------- --------------- --------------- ------------ ---------- ----------------
Ajay Saldanha None None n/a None n/a None n/a
& Related
Parties
----------- ---------- --------------- --------------- ------------ ---------- ----------------
Total 26,543,043 n/a n/a 250,073,572 276,616,615 n/a 6.92%
----------- ---------- --------------- --------------- ------------ ---------- ----------------
Table 2: Kibo Director & Related Parties' Kibo holdings
before and after Loan Note Conversion
Louis Coetzee, CEO of Kibo Energy PLC, says: "We are pleased to
have reached agreement with various stakeholders to implement
several measures to ensure the Company's financial and operational
stability and to secure its development plans. The warrant
repricing aims to provide more favorable terms to warrant holders,
most of which include existing shareholders, while supporting the
Company's funding requirement.
"Additionally, the conversion of the convertible loan notes will
deleverage the Company's balance sheet by significantly reducing
its debt exposure. The commitment by noteholders is also testament
of their confidence in the Company's strategy and long-term
development plans to deliver renewable energy projects that are
commercially viable."
**S**
This announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014 and is
announced in accordance with the Company's obligations under
Article 17 of the specified Regulation.
For further information please visit www.kibo.energy or
contact:
Louis Coetzee info@kibo.energy Kibo Energy PLC Chief Executive
Officer
James Biddle +44 207 628 3396 Beaumont Cornish Nominated Adviser
Roland Cornish Limited
------------------------------ ----------------------- ----------------------
Claire Noyce +44 20 3764 2341 Hybridan LLP Joint Broker
------------------------------ ----------------------- ----------------------
Damon Heath +44 207 186 9952 Shard Capital Partners Joint Broker
LLP
------------------------------ ----------------------- ----------------------
Zainab Slemang zainab@lifacommunications.com Lifa Communications Investor and Media
van Rijmenant Relations Consultant
------------------------------ ----------------------- ----------------------
Johannesburg
11 April 2023
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