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Conversion of Sanderson Minority Interest in Mbeya Development to Kibo Shares
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: 05 March 2019
Kibo Energy PLC (‘Kibo’ or the ‘Company’)
Conversion of Sanderson Minority Interest in Mbeya Development to Kibo
Shares & Continuation of Forward Payment Facility
Kibo Energy PLC (“Kibo” or the “Company”), the multi-asset, Africa focused, energy company, is pleased to
announce that it has today signed a binding Term Sheet with Sanderson Capital Partners (“Sanderson”) for the
conversion of Sanderson’s 2.5% equity interest in the Company’s 100% owned Tanzanian subsidiary, Mbeya
Development Company Limited (“Mbeya Development”) to ordinary shares in Kibo (the “Conversion”).
Mbeya Development is the holder of the Company’s physical 120.8Mt Coal Resource (see RNS dated 11 April
2016) in Tanzania under Mbeya Coal LTD as well as the power project under Mbeya Power LTD. Kibo is
continuing its clarification enquiries regarding the TANESCO decision referred to in the 14 February 2019
RNS. In parallel the Company is also continuing to pursue other commercial opportunities for the Mbeya Coal
to Power Project (“MCPP”), previously identified during the development of the MCPP which now present
very attractive options given the advanced development status of the MCPP. These include amongst others the
possibility to develop the MCPP as a dedicated facility for the power export market and / or local private market.
Conversion of Sanderson’s 2.5% Interest in Mbeya Development
* Kibo will issue 126,436,782 new Ordinary Shares of par value €0.015 (the “Conversion Shares”) to
Sanderson in conversion of its 2.5% minority interest in Mbeya Development. The amount of Conversion
Shares is calculated on the basis of a valuation of GBP 66 million for 100% of the Mbeya Coal Resource
based on the weighted average total of the estimated market value of Mbeya Development’s Coal Resource
held under Mbeya Coal LTD and the net present value of the proposed Coal Mine based on a 1.5 million
ton per annum production figure as determined in the definitive mining feasibility study for the Mbeya
Coal Mine . The Conversion Shares have been calculated based on a Kibo share price of GBP0.013050
(being €0.015 at a GBP:EUR exchange rate of 1.1494). The underlying carrying value of Mbeya
Development has been capitalised as an intangible asset at consolidated group level amounting to
£15,896,105 as at 31 December 2017, as per Kibo’s latest available audited group consolidated accounts.
*Sanderson will be entitled to a 0.3% royalty of the future operating profits of the proposed Mbeya Coal
Mine should it go into production. This royalty is capped at a maximum of GBP 2 million and an annual
production of 1.5million tonnes per annum over a mine life of 25 years.
*Sanderson will retain no claim of whatever nature in the equity of Mbeya Development.
* Sanderson will have the option to appoint one representative to the Board of Kibo as a non-executive
director, conditional on the appointee being acceptable to Kibo and meeting all other regulatory
requirements for appointment, and only for as long as Sanderson holds a direct interest of more than 20%
of Kibo’s issued share capital. Should Sanderson’s interest fall below this threshold, Kibo will have the
option to remove the Sanderson appointee from its Board. The details of the service contract of any
proposed director would be released at the time a Sanderson representative is appointed.
* Sanderson will notify Kibo in writing, five days in advance of any intention to sell, loan or otherwise
dispose of any of its shares held in Kibo and acquired under binding Term Sheet, together with the amount
it wishes to dispose of and the price per share it is asking. This is to allow Kibo’s brokers the option to
procure the placing of such shares at the relevant price and so ensure an orderly trading in the Company’s
shares.
Continuation of Forward Payment Facility
The Term Sheet also provides for the continuation of Kibo’s USD 2,940,000 Forward Payment Facility (the
“Facility”) signed between Kibo and Sanderson, the full details of which are contained on the Company’s RNS
dated 21 December 2016 and which remains available under the same terms and conditions save for points
covered below. The facility is currently undrawn with the previously outstanding balance having been settled
in full in July 2018 (see RNS dated 9 July 2018).
The Facility will be available for a first immediate draw by Kibo, amounting to GBP100,000 and a second draw
on or any time before 15 March 2019 amounting to no more than GBP400,000. Any additional draw-downs of
the balance of the USD 2,940,000 limit are to be agreed between Kibo and Sanderson on a case by case basis,
and all draw-down amounts will be subject to a facilitation and implementation fee of GBP5,000 per
GBP100,000 drawn down. Kibo is not obliged to draw down any of the Facility and the initial fee payment of
USD732,036 of ordinary shares in Kibo, made to Sanderson under the original Facility arrangement, was a one-
off payment and is not required to be paid again.
Discussion
This Conversion is welcomed by the Company as it provides validation of what it believes is an attractive
investment opportunity provided by its energy assets across Africa and the UK. Sanderson has been a long and
stable supporter of Kibo from an early stage and now with a significant shareholding and the option for board
representation, Sanderson is expected to bring enhanced funding capability to the Company both internally and
from its financial business network. We are also encouraged by Sanderson’s willingness to include an orderly
market-style provision in the agreement, which Kibo believes is a vote of confidence in the future prospects of
our asset portfolio. Further, should Sanderson elect to exercise its option to appoint a director to the Kibo Board
the effect would be to bind it to compliance with the Company’s share dealing code, imposing strict share
trading controls on it, in addition to the aforementioned orderly market arrangement.
The continuation of the Facility also provides the Company with the option of short-term funding as necessary
within the Facility limit to enable it to maintain momentum behind its on-going development work across its
African and UK projects while also examining a range of additional funding options for the Company.
Application will be made for the Conversion Shares to be admitted to trading on AIM and the JSE AltX markets.
Trading in the Conversion Shares is expected to commence on AIM and the JSE on or around 11 March 2019
('Admission'). Following Admission, the Company will have 766,467,851 shares in issue. This figure may be
used by shareholders as the denominator for calculations to determine if they are required to notify their interest
in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.
Following the settlement, Sanderson’s shareholding in the Company will increase from 52,764,905 to
179,201,687 ordinary shares representing an increase in interest from 8.24% to 23.38% in the Company. This
will result in Sanderson becoming a related party of Kibo for the purposes of the AIM Rules for Companies.
The interest in the Company of Kibo’s other significant shareholder, Sechaba Natural Resources Limited, will
decrease from 22.07% to 18.43% on an unchanged holding of 141,260,030 ordinary shares.
Louis Coetzee, CEO of Kibo, said: “We are very pleased with the agreement reached with Sanderson to
convert its underlying interest in Mbeya Development into Kibo PLC shares. Sanderson will now become a
true cornerstone institutional investor in Kibo and we are optimistic that Sanderson will also defend its
shareholding position in future bringing further stability to the Company’s ongoing funding position. We also
see this as a strong signal to the market of Sanderson’s confidence in Kibo’s project portfolio which continues
to advance on multiple fronts as we seek to address the critical requirement for energy security in sub-Saharan
Africa by becoming a leading regional power producer.”
**ENDS**
This announcement contains inside information as stipulated under the Market Abuse Regulations (EU) no.
596/2014 ("MAR").
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
Ben Tadd / +44 (0) 20 3700 0093 SVS Securities Limited Joint Broker
Tom Curran
Jason Robertson +44 (0) 20 7374 2212 First Equity Limited Joint Broker
Andrew Thomson +61 8 9480 2500 RFC Ambrian Limited NOMAD on AIM
Isabel de Salis/ Gaby +44 (0) 20 7236 1177 St Brides Partners Ltd Investor and Media
Jenner Relations Adviser
Notes to editors
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 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.
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 Reserve Power
generation market.
Johannesburg
05 March 2019
Corporate and Designated Adviser
River Group
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