REG - Kibo Energy PLC - Kibo Subsidiary Announces Update of JVA

Kibo EnergyAnnouncement

01/12/2023 07:00

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RNS Number : 2994V  Kibo Energy PLC  01 December 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: 1 December 2023

 

Kibo Energy PLC ('Kibo' or the 'Company')

 

Kibo Subsidiary Announces Update of Joint Venture Agreement

 

Kibo Energy PLC (AIM: KIBO; AltX: KBO), the renewable energy-focused
development company, announces that further to its previous announcements
dated 23 October 2023 and 13 November 2023, respectively, its subsidiary Mast
Energy Developments PLC ('MED'), a UK-based multi-asset owner, developer and
operator in the rapidly growing flexible market, announces that, under the
terms of the binding Joint Venture Agreement (JVA'), Proventure Holdings (UK)
Ltd, part of the Proventure Group ('Proventure'), has failed to meet the
conditions to complete the transaction by the contractually agreed completion
long-stop date of 30 November 2023.

 

Under the terms of the JVA, Proventure is required to make an initial interim
payment of £2m (the 'Interim Payment') as well as payment of the balance of
the investment due of c. £3.9m to the Joint Venture Special Purpose Vehicle
('SPV'). Unless or until the JVA has been completed, Proventure remains
contractually bound under the JVA, and remains in breach of its obligations
thereto.  As a result of Proventure not performing, MED has given Proventure
formal notice of enforcement and Proventure now has seven (7) days to remedy
the position. If Proventure fails to do so within the remedial timeline, MED
will consider all its available options, including, but not limited to,
terminating the JVA save for MED's right to claim damages and costs,
commencing proceedings against Proventure and affected parties as well as
alternative investment opportunities. MED has furthermore made the decision to
grant no further extensions with respect to the deadline for the completion of
the JV.

 

As announced in the Company RNS dated 13 November 2023, MED provided an
extension in respect of the Interim Payment deadline and Proventure has thus
incurred a total late payment penalty amounting to £60,000 as well as
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 due and payable by Proventure to MED. Under the terms of the
JVA, in addition to the foregoing penalties, should the JVA be terminated,
Proventure shall furthermore pay to MED liquidated damages as a sum equal to
5% of the total investment value due and any reasonable costs and expenses
incurred by MED in connection with the agreement.

 

In consideration of the delays, MED has proceeded with advanced discussions
with an alternative institutional investor to secure the necessary funding
required to advance MED's development plans.

 

Further details can be found in the full MED announcement, which is available
below and at med.energy (https://med.energy/?page_id=3140) :

 

 

-------------------------

Dated: 01 December 2023

 

Mast Energy Developments PLC ('MED' or 'the Company')

 

MED Binding Joint Venture Agreement Completion Update

 

Mast Energy Developments PLC, the UK-based multi-asset owner, developer and
operator in the rapidly growing flexible power market, announces that further
to its previous announcements dated 23 October 2023 and 13 November 2023
respectively, under the terms of the binding JVA, Proventure is required to
make an initial interim payment of £2m (the 'Interim Payment') as well as
payment of the balance of the investment of c. £3.9m to the Joint Venture
SPV, in order to complete the transaction by the contractually agreed
completion long-stop date of 30 November 2023.

 

Proventure has not met the abovementioned conditions under the JVA and unless
or until the JVA has been completed, Proventure remains contractually bound
under the JVA and is yet to perform its obligations thereof. As a result of
Proventure not performing such obligations, MED has given Proventure formal
notice of enforcement and Proventure now has seven (7) days to remedy the
position. If Proventure fails to do so within the remedial timeline, MED will
consider all its available options, including, but not limited to, terminating
the JVA save for MED's right to claim damages and costs, commencing
proceedings against Proventure and associated parties, as well as alternative
investment opportunities.

 

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 total late payment penalty amounting to
£60,000 as well as 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 due and payable by Proventure to MED
unless waived in part or in full by MED. Under the terms of the JVA, in
addition to the foregoing penalties, in the event that the JVA is terminated,
Proventure shall pay to MED liquidated damages being a sum equal to 5% of the
total investment value due, plus any reasonable costs and expenses incurred by
MED in connection with the agreement. All of the foregoing penalties exclude
MED's right to claim further damages as a result of the breach and potential
misrepresentation by Proventure.

 

Further, MED is in advanced discussions with an alternative institutional
investor in order to secure the necessary funding required to advance MED's
development plans, should Proventure fail to remedy the position referred to
above. In the meantime, MED is in the process of also assessing various
short-term funding options in order to ensure that the Company can meet its
ongoing working capital requirements.

 

Moreover, MED has decided to put its Pyebridge 9MW flexible power generation
asset (the 'Site') into care and maintenance, in preparation for a significant
overhaul work programme planned for the Site's reciprocal generation engines,
pending the necessary funding. The planned work programme will result in the
Site reaching its full generation, efficiency and profitability potential.
Until such time that the work programme has been completed, no further revenue
from the Site is expected.

 

Pieter Krügel, MED CEO, commented: "We are, of course, very disappointed with
Proventure's continued inability to meet their commitments within the agreed
contractual timelines. MED has been working tirelessly to assist and support
Proventure and we have done everything we possibly could to ensure successful
delivery, however, Proventure's performance is unfortunately outside of MED's
control. Based on the latest assurances from Proventure, the MED Board remains
cautiously optimistic that Proventure remains fully committed to and should be
able to remedy the position within the remedial timeline to pave the way
towards building a fruitful partnership with them.

 

"In the meantime, we are engaged in advanced discussions with an alternative
institutional investor in order to secure the necessary capex funding to
advance MED's development plans should Proventure fail to remedy the position
referred to above and we are looking forward to updating the market
accordingly."

 

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 (http://www.med.energy/)
or contact:

 

 Pieter Krügel                 Info@med.energy (mailto:Info@med.energy)                              Mast Energy Developments PLC  CEO
 Jon Belliss                   +44 (0)20 7399 9425                                                   Novum Securities              Corporate Broker
 Zainab Slemang van Rijmenant  zainab@lifacommunications.com (mailto:zainab@lifacommunications.com)  Lifa Communications           Investor & Media Relations Advisor

 

This announcement contains inside information as stipulated under the UK
version of the Market Abuse Regulations (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 information
is now considered to be in the public domain.

 

**ENDS**

 

For further information please visit www.kibo.energy (http://www.kibo.energy/)
or contact:

 

 Louis Coetzee                 info@kibo.energy (mailto:info@kibo.energy)                            Kibo Energy PLC             Chief Executive Officer
 James Biddle                  +44 207 628 3396                                                      Beaumont Cornish Limited    Nominated Adviser

 Roland Cornish
 Claire Noyce                  +44 20 3764 2341                                                      Hybridan LLP                Joint Broker
 Damon Heath                   +44 207 186 9952                                                      Shard Capital Partners LLP  Joint Broker
 Zainab Slemang van Rijmenant  zainab@lifacommunications.com (mailto:zainab@lifacommunications.com)  Lifa Communications         Investor and Media Relations Consultant

 

Johannesburg

1 December 2023

Corporate and Designated Adviser

River Group

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