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Kibo Subsidiary Announces New Funding Partner, Funding Agreement, Capacity Market Contract & Proventure Termination
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: 28 February 2024
Kibo Energy PLC ('Kibo' or the 'Company')
Kibo Subsidiary Announces New Strategic Funding Partner & Funding Agreement, New
Capacity Market Contract, and Termination of Proventure JVA
Kibo Energy PLC (AIM: KIBO; AltX: KBO), the renewable energy-focused development company,
announces that its subsidiary Mast Energy Developments PLC ('MED'), a UK-based multi-asset
owner, developer and operator in the rapidly growing flexible power market has announced a new
strategic funding partner & funding agreement, a new Capacity Market contract and termination of
the Proventure joint venture agreement.
Noting that the Funding Agreement described below is with f RiverFort Global Opportunities PCC
Limited ("RiverFort"), an 11.68% shareholder in Kibo and MED, a subsidiary of Kibo, the Funding
Agreement is a related party transaction under the AIM Rules. Accordingly, the Directors, having
consulted with the Company's nominated adviser, Beaumont Cornish Limited, consider the terms of
the Funding Agreement to be fair and reasonable insofar as Kibo shareholders are concerned. In
forming this view the Directors note the near-term funding requirements of MED and the financial
benefits getting Pyebridge back into operation should bring.
Further details can be found in the full MED announcement, which is available below and at
med.energy:
__________________________________________
Dated: 28 February 2024
Mast Energy Developments PLC ('MED' or 'the Company')
New Strategic Funding Partner & Funding Agreement, New Capacity Market Contracts, and
Termination of Proventure JVA
Mast Energy Developments PLC, the UK-based multi-asset owner, developer and operator in the
rapidly growing flexible power market, is pleased to announce that it has signed a funding agreement
("Funding Agreement") with an initial funding facility up to £4,000,000 with RiverFort Global
Opportunities PCC Limited ('RiverFort"). The Funding Agreement was arranged by Fortified
Securities and will see RiverFort joining MED as its strategic funding partner to provide and facilitate
funding to develop and construct MED's existing c. 30MW portfolio of assets and new acquisitions
to achieve MED's strategic goal of building an enlarged 300MW portfolio of flexible power assets.
New Funding Agreement Key Highlights
* Funding Agreement between MED subsidiary Pyebridge Power Ltd ("Pyebridge"), MED
and RiverFort by way of a secured facility (the "Investment") for a commitment amount of
up to £4m.
* An initial advance of £450,000 following execution of the Funding Agreement ("Initial
Advance").
* Further advances will be made by the Investor on the same terms as the Initial Advance.
* Use of proceeds of the Initial Advance:
- To lift MED's Pyebridge 9MW flexible power generation asset (the 'Site') out of care
and maintenance (see RNS dated 1 December 2023), by initiating first phase of the
overhaul work programme of the Site's reciprocal generation engines in order to
recommence production and trading revenue generation during April 2024.
- General working capital purposes of Pyebridge and MED.
* Further funding up to the commitment amount of up to £4m which will predominantly be
used to fund the Site's overhaul work programme in order to achieve full generation,
efficiency and profitability potential, as well as the further development of MED's other
existing sites and additional sites in the future.
* MED and RiverFort in renewed discussions with a number of debt providers including Close
Brothers to complement RiverFort's funding for MED's projects' capex requirements. This
is part of an approach to create a scalable financing framework anchored by RiverFort.
* Drawdowns under the Investment will have a term of 24 months and attract an annual interest
rate of 12% rolled up and paid at maturity.
* Any outstanding balances are to be repaid in cash on the Maturity Date (excluding any
balances converted pursuant to the Equity Rights (as described below)).
* MED to act as guarantor to Pyebridge for the re-payment of drawdowns under the Investment
on an unsecured basis.
* RiverFort will hold senior security over the assets of Pyebridge while there remains an
outstanding balance on the Investment, save to the extent that this will be released by
RiverFort to facilitate project finance on a secured basis.
* RiverFort will have the right to convert the outstanding balance on the Investment to
Preference Shares in Pyebridge once it exceeds £1million of outstanding balance pursuant to
the Investment. The conversion into Preference Shares will represent 12.5% of the issued
share capital (on a fully diluted basis). This can be increased up to 20% of the issued share
capital (on a fully diluted basis) by the conversion of outstanding balances during the term of
the Investment up to £2,000,000 ("Equity Rights"). The Equity Rights will:
- Provide a preferential return on all income or capital distributions with 12.5%
representing 50% of all distributions with the balance due to the ordinary shares in
Pyebridge, such percentage increasing with further investment and transformation into
Preference Shares;
- Provide a preferential return on capital risk representing the value of the Investment
converted into the Equity Rights prior to distribution to the shareholders of Pyebridge;
- Provide a right to appoint up to 2 directors and an observer to the board of Pyebridge;
- Include veto and consent rights customary with an investment of the nature of the
Investment (including approval of any material disposals or investments by
Pyebridge); and
- Not include any fixed returns, coupons or other guaranteed returns.
* MED and RiverFort have agreed on an allocation budget for drawdown funds and will
cooperate on restructuring the liabilities of MED and Pyebridge to ensure the on-going
viability of the MED Group by reducing short term creditors.
New Capacity Market Contracts
MED applied for and was successful in pre-qualification to bid for new CM contracts for its Pyebridge
Site, in addition to the Site's existing CM contracts (see RNS dated 27 February 2023), being a T-1
CM contract and a T-4 CM contract. Following the preparation of a robust CM Auction bid strategy,
MED is pleased to announce that pursuant to the recent Capacity Market Auctions and subsequent
results, its T-1 bid cleared at £35.79/kW/annum, which equates to an additional c. £183k of income
to the Site, and its T-4 bid cleared at £65/kW/annum, which equates to an additional c. £322k of
income to the Site. The Site's existing and new CM contracts are all fixed one-year contracts. The
plan and intention is to apply for the maximum 15-year term and capacity T-4 CM contract in due
course once the Site's planned overhaul work programme as referred to above has been completed,
which is expected to provide further enhanced and longer term guaranteed income to the Site.
Termination of Proventure JVA
MED announces further to its previous RNS dated 8 January 2024, due to Proventure failing to
remedy its material breach of the JVA, and considering the exhaustive correspondence and process
by MED to accommodate and work around the persistent and continuing delays by Proventure to
fulfil its overdue obligations under the JVA, after due and careful consideration the MED Board has
decided to terminate the JVA with Proventure with immediate effect. MED will now consider
pursuing its available options for legal recourse against Proventure, its CEO, Mr. Srinivas Kona and
other directors.
In consideration for MED previously granting an extension in respect of the Interim Payment
deadline, as set out in our announcement dated 13 November 2023, Proventure has incurred a default
payment of £3,000 per calendar day that the Interim Payment remained unpaid, calculated from the
initial default date of 11 November 2023, until such time as it is received by MED, in addition to
liquidated damages of 0.25% of the total investment balance due, plus any additional costs and
expenses incurred by MED in respect of the JV projects, all of which are now due and payable by
Proventure to MED. Under the terms of the JVA, in addition to the foregoing payments, upon
termination of the JVA, Proventure shall pay to MED any reasonable costs and expenses incurred by
MED in connection with the JVA. All of the foregoing payments exclude MED's right to claim
further damages from Proventure as a result of its material breach of the JVA and potential
misrepresentation by Proventure and its directors.
In conjunction with the above, MED will now also consider pursuing its available options for legal
recourse against the initial JV lead-investor, Seira Capital and its directors, as previously announced
in the RNS dated 22 September 2023.
Further, the Arrangement Fee with Mr. Ajay Saldanha, in relation to the introduction, arrangement
and consulting fees with regards to the JV transaction that was due and payable upon completion of
JV transaction, as previously announced in the RNS dated 12 July 2023, will no longer be applicable.
Pieter Krügel, MED CEO, commented: "The MED board is delighted to have concluded the new
funding agreement with RiverFort and we welcome such a key institutional investor as a strategic
funding partner to MED. We believe that this new funding agreement will fast-track MED's growth
plans and unlock value for our shareholders.
"We are excited about the progress and developments that will result from this new funding
agreement, and look forward to updating our shareholders and the market accordingly in due
course."
ENDS
This announcement contains inside information for the purposes of the UK version of the Market
Abuse Regulation (EU No. 596/2014) as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018 ('UK MAR'). Upon the publication of this announcement,
this inside information is now considered to be in the public domain.
For further information please visit www.med.energy or contact:
Pieter Krügel Info@med.energy Mast Energy Developments PLC CEO
Jon Belliss +44 (0)20 7399 9425 Novum Securities Corporate Broker
________________________
**ENDS**
For further information please visit www.kibo.energy or contact:
Louis Coetzee info@kibo.energy Kibo Energy PLC Chief Executive Officer
James Biddle
Roland Cornish +44 207 628 3396 Beaumont Cornish Limited Nominated Adviser
Claire Noyce +44 20 3764 2341 Hybridan LLP Joint Broker
Damon Heath +44 207 186 9952 Shard Capital Partners LLP Joint Broker
Beaumont Cornish Limited ('Beaumont Cornish') is the Company's Nominated Adviser and is
authorised and regulated by the FCA. Beaumont Cornish's responsibilities as the Company's
Nominated Adviser, including a responsibility to advise and guide the Company on its responsibilities
under the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed solely to the
London Stock Exchange. Beaumont Cornish is not acting for and will not be responsible to any other
persons for providing protections afforded to customers of Beaumont Cornish nor for advising them
in relation to the proposed arrangements described in this announcement or any matter referred to
in it.
Johannesburg
28 February 2024
Corporate and Designated Adviser
River Group
Date: 28-02-2024 09:00:00
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