Wrap Text
Strategic Development Agreement with SEPCOIII,
to Develop Energy Projects
Kibo Mining 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: 03 July 2018
Kibo Mining Plc (‘Kibo’ or the ‘Company’)
Strategic Development Agreement with SEPCOIII,
To Develop Energy Projects
Kibo Mining Plc (AIM:KIBO; AltX:KBO), the multi-asset, Africa-focused, energy company, is pleased to
announce that it has signed a Strategic Development Agreement (‘SDA’) with China based SEPCOIII (‘SEPCOIII’),
one of the world’s largest power EPC contractors, to work with Kibo towards enhancing its strategy and the
development of its portfolio of energy projects. As part of the SDA, SEPCOIII has committed to a two-stage equity
investment into Kibo, endorsing the Company’s strategy and its position in the African power market.
Highlights
*Strategic relationship provides Kibo with one of the world’s largest power EPC contractors to execute its
three existing energy projects and any additional future energy projects;
*Equity investments will provide Kibo with the funds necessary to fulfil its capital requirements over the
short to medium term and endorse the Company’s strategy to position the Kibo as a leading regional energy
player in Africa;
*Significant advantages of having an intentional recognised industry leader’s support and resources in both
project fulfilment, development and financing negotiations; and
*Kibo believes SEPCOIII’s involvement in EPC and equity finance endorses and underpins Kibo’s business
model.
Kibo’s CEO, Louis Coetzee, said, “This is excellent news for Kibo on multiple levels: it is a major endorsement
by one of the world’s largest power EPC contractors of both our portfolio and strategy aimed at alleviating the
acute energy deficit in Africa; it provides us with short to medium term cash stability; and it further strengthens our
network of key partners and institutional investors to support us as we advance our portfolio of energy projects.
Crucially, SEPCOIII’s commitment of support significantly strengthens Kibo’s position in project development
paths as well as future financing negotiations due to its international reputation and record of delivery of large
scale utility energy projects globally.
“The SDA is the fruition of many months of negotiating with SEPCOIII, which recognises our position as a
bridgehead into the African energy arena. We look forward to strengthening and deepening our longstanding
working relationship with the SEPCO III team and to building a leading position in the African energy sector
together.”
Summary of Principal Terms of SDA
Under the terms of the SDA, SEPCOIII has committed to an initial direct equity investment (‘Direct Equity
Investment 1’) of between 10 and 15 per cent of Kibo’s issued share capital immediately prior to Direct Equity
Investment 1 via the purchase of new ordinary shares in consideration for cash at a price to be agreed between the
two parties. Additionally, SEPCOIII has the option, at its sole discretion and within 18 months from completion of
Direct Equity Investment 1, to make a second direct equity investment in Kibo of between 5 to 10 per cent. of Kibo’s
issued share capital (‘Direct Equity Investment 2’) immediately prior to Direct Equity Investment 2.
As part of the SDA, SEPCO III has the right to become the sole bidder for the EPC contract in respect of all Kibo’s
existing and future energy projects anywhere in the world by making Direct Equity Investment 1, subject to the
terms and conditions of the SDA. SEPCOIII will however be required to strictly submit all EPC bids in respect of
the Kibo Energy Project Portfolio in accordance with an EPC-specification independently developed by Kibo and
its consulting engineers. All EPC bids by SEPCOIII must, in the opinion of Kibo’s consulting engineers, be price
competitive as related to an international benchmark independently determined by Kibo’s consulting engineers, in
their expert opinion, for reasonably comparable EPC contractors and contracts. The bid must also demonstrate
international best practice and industry standards and must ultimately also be acceptable to Kibo’s financial
advisors, lenders and other principal capital providers and key stakeholders. SEPCOII’s right to be sole bidder on
the relevant contract will terminate if the parties cannot reach agreement on bid price and terms within 90 days of
bid submission.
The SDA is inter alia conditional upon the following requirements to be met:
*Both Parties obtaining all approvals in their relevant jurisdictions to enter into the SDA;
*SEPCOIII completing a due diligence investigation on Kibo and its project portfolio as required by
SEPCOIII internal procedures;
*Both parties agreeing on the final percentage and issue price for the shares that will be purchased in
consideration for Direct Equity Investment 1;
*SEPCOIII completing Direct Equity Investment 1; and
*The meeting of all conditions by 30 September 2018, unless the parties have mutually extended or waived
this requirement.
Typical termination provisions are included in the SDA, such as breach, commercial viability and changes to the
political landscape, with SEPCOII to prioritise any exit of Kibo equity at prices not lower than the free market price.
About SEPCOIII
SEPCOIII is a Chinese-based, leading international construction and engineering company that specialises in the
construction of power plants via the EPC method. As a large, vertically integrated company, SEPCOIII can
comprehensively manage multiple aspects of the development of power projects including engineering, logistics,
shipping, operation and maintenance.
SEPCOIII has been responsible for the delivery of numerous power projects around the world since its founding in
1985. It provides power plants in the categories of thermal power, nuclear power, concentrating solar power, wind
power, photovoltaic power, biomass power, geothermal power, transformer substation, and sea water desalination.
Its areas of operation to date have included Egypt, India, Indonesia, Jordan, Nigeria, Oman, Saudi Arabia,
Bangladesh, Pakistan, Kuwait, Myanmar, South Africa and Singapore and it is committed to the continuation of its
international expansion. In the last decade SEPCOIII has gained further global recognition for its work in India,
where it has successfully achieved construction of 12,210MW of installed capacity consisting of 23 units. SEPCOIII
is also the first Chinese EPC contractor to enter into the Saudi Electricity Company market and is the biggest EPC
contractor in Middle East North Africa (“MENA”) region. A summary of the EPC projects completed by SEPCOIII
in the past five years is tabled below.
Scope in
No. Project Name Capacity Location Client Name OEM
Brief
Boiler: Harbin
Boiler Co., Ltd.
Turbine: Dongfang
ITPCL 2x600MW Cuddalore, IL&FS Tamil Engineer,
Turbine Co., Ltd.
1 Subcritical Power Tami Nadu Nadu Power Procurement,
2x600MW Generator:
Plant State, India Company Ltd. Construction
Dongfang Electric
Machinery Co.,
Ltd.
Rabigh 2x660MW Engineer,
Rabigh, Saudi
2 IPP Oil-Fired Power 2x660MW ACWA&KEPCO Procurement, DEC
Arabia
Plant Construction
RAZ 2400MW RAS Al Engineer,
3 Combined Cycle 2400MW Khair, Saudi SWCC Procurement, Simens
Power Plant Arabia Construction
Cairo Electricity
Banha 750MW Engineer,
Production
4 Combined Cycle 750MW Banha, Egypt Procurement, GE
Company
Power Plant Construction
(CEPC)
Middle Delta
Giza North 1500MW Electricity Engineer,
5 Combined Cycle 2250MW Giza Egypt Production Procurement, GE
Power Plant Company Construction
(MDEPC)
Boiler: Harbin
Boiler Co., Ltd.
Turbine: Dongfang
Engineer,
Jerada 350MW Jerada, Turbine Co., Ltd.
6 350MW ONEE Procurement,
Thermal Power Plant Morocco Generator:
Construction
Dongfang Electric
Machinery Co.,
Ltd.
Off-taker: Oman
Power and Water
Procurement
Company
(OPWP)
Gas Turbine: GE
Developer: The Engineer,
Salalah, 6FASTG: Skoda
7 Oman Salalah 2 IPP 447.8MW Consortium of Procurement,
Oman HRSG: Hangzhou
ACWA Power, Construction
Boiler
Mitsui and
DIDIC. Owner:
Dohfar
Generating
Company (DGC)
Off-taker:
National Boiler: Harbin
Transmission and Boiler Co., Ltd.
Despatch Turbine: Dongfang
Engineer,
Port Qasim Coal- Port Qasim, Company Turbine Co., Ltd.
8 2x660MW Procurement,
Fired Power Project Pakistan Limited (NTDC) Generator:
Construction
Client: Port Dongfang Electric
Qasim Electric Machinery Co.,
Power Company Ltd
(Private) Limited
Off-taker:
Haveli Gas Turbine: Ge
1230 MW Haveli National Power Engineer,
Bahadur 9H0.1 HRSG:
9 Bahadur Shah CCPP, 1230MW Park Procurement,
Shar, Punjab, Alstom STG:
Pakistan Management Co. Construction
Pakistan Alstom
Ltd
Samra Phase IV Al Samra Electricity Engineer,
STG: FUJI,
10 Combined Cycle Gas 66.4MW Hashimiyah, Power Company Procurement,
HRSG: STF
Fired Power Plant Aman, Jordan (SEPCO) Construction
Thaketa Gas-Fired
U Energy Engineer,
Combined Cycle
11 110MW Myanmar Thaketa Power Procurement, UREC
Power Plant in
Co. Ltd. Construction
Yangon, Myanmar
**ENDS**
This announcement contains inside information as stipulated under the Market Abuse Regulations (EU) no. 596/2014
("MAR").
For further information please visit www.kibomining.com or contact:
Louis Coetzee info@kibomining.com Kibo Mining Plc Chief Executive Officer
Andreas Lianos +27 (0) 83 4408365 River Group Corporate and Designated
Adviser on JSE
Ben Tadd / +44 (0) 20 3700 0093 SVS Securities Joint Broker
Tom Curran Limited
Jon Belliss +44 (0) 20 7399 9400 Novum Securities Ltd Joint Broker
Andrew Thomson +61 8 9480 2500 RFC Ambrian Limited NOMAD on AIM
Isabel de Salis / +44 (0) 20 7236 1177 St Brides Partners Ltd Investor and Media
Priit Piip Relations Adviser
Notes to editors
Kibo Energy plc is a multi-asset, Africa focussed, 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.
Johannesburg
03 July 2018
Corporate and Designated Adviser
River Group
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