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Unaudited Condensed Interim Financial Results for the six months ended 31 December 2018
AEP Energy Africa Limited
Incorporated in the Republic of South Africa
(Registration number 2017/024904/06)
JSE share code: AEY
ISIN: ZAE000241741
("AEP" or "the Company")
Unaudited Condensed Consolidated Interim Results for the six months ended 31 December 2018
Introduction
1. Nature of business
AEP was incorporated on 24 January 2017 and successfully listed as a Special Purpose Acquisition Company (SPAC) on
the Alternative Exchange (AltX) of the JSE on 30 June 2017. The primary purpose of a SPAC is to pursue the acquisition
of viable assets being investments in commercial enterprises in the energy sector with high growth potential. Unless and
until such viable assets are acquired, the only material asset of a SPAC is the cash which it holds pursuant to a capital
raise through the issue of shares. The cash is held in escrow and invested conservatively for the protection of
the Company's shareholders. If the acquisition of a viable asset is not completed within a 24 month period from the date
on which the SPAC was listed or such later date as the JSE may permit, the SPAC is required to return the
subscription funds initially invested to shareholders, plus accrued interest, less permissible expenses and taxation.
AEP's business model is to acquire energy infrastructure or businesses that are operating and cash generative,
or related assets under construction that are not more than 12 months from commercial operations.
There have been no material changes to the nature of the Company's business from the prior period.
2. Commentary
On 26 June 2018, AEP entered into an agreement ("the Sale and Purchase Agreement") with First Independent Power
(Kenya) Limited and Global Power Generation Sociedad Anónima ("the Seller") to acquire 100% of the issued share
capital of, and all shareholders' claims against, IberAfrica Power (East Africa) Limited for a total consideration of $61.5
million ("the Viable Acquisition"). On 26 October 2018 the Viable Acquisition was approved by the Company's
shareholders in general meeting.
As at 31 December 2018, AEP was in the process of implementing the Viable Acquisition.
On 27 March 2019 the board of directors of AEP ("Board") announced that the Company has received notice of
termination from the Seller in relation to the Sale and Purchase Agreement, owing to delays in achieving completion of the
Viable Acquisition. The Board is considering the way forward, considering that the Company is a SPAC and has a
deadline of no later than 30 June 2019 to acquire a viable asset.
All income generated thus far has solely been from interest received on cash balances. The Company made a loss after
tax for the period of R12,009,370 (31 December 2017: R6,962,600). Basic and headline loss of 228.50 cents per share
(31 December 2017: 132.48 cents per share) is based on 5 255 680 shares, being the weighted average number of
shares in issue over the interim period to 31 December 2018 and is a result of interest received from funds in escrow and
current accounts, less permissible expenses.
The current tax for the period under review amounts to R226,574 (31 December 2017: R354,037).
3. Comparatives
Comparative financial information for the period ended 31 December 2017 and the year ended 30 June 2018 is included
in this report.
4. Dividends
There were no dividends declared for the interim period.
5. Board of Directors
The directorate at the date of this report is as follows:
Executive directors
ECMB Kikonyogo (Chief Executive Officer and acting Finance Director)
N Gugushe (Chief Operating Officer)
KG Simons (Chief Financial Officer) - resigned on 3 October 2018
Non-executive directors
DW Wright* (Chairman)
SM David*
CJ Dooling*
SS Sibiya*
MM Kekana*
SM Moloko
TP Leeuw
ONW Petersen
* Independent
6. Registered office
The registered address of the company is: Second Floor, Illovo Boulevard
28 Fricker Road
Illovo
Sandton
2196
7. Company secretary
The company secretary of AEP is Imbokodvo Bethany Governance and Statutory Compliance Proprietary Limited
who is represented by Ms Siphiwe Ngwenya.
Business address: First Floor, Yellowwood House
Ballywoods Office Park
33 Ballyclare Drive
Bryanston
2196
8. Designated advisor
Questco Corporate Advisory Proprietary Limited is the designated advisor to AEP.
Business address: First Floor, Yellowwood House
Ballywoods Office Park
33 Ballyclare Drive
Bryanston
2196
Date of issue: 29 March 2019
Preparer
The unaudited condensed consolidated interim results for the six months ended 31 December 2018 have been prepared
under the supervision of ECMB Kikonyogo in his capacity as the acting finance director.
Unaudited Condensed Consolidated Statement of Financial Position as at 31 December 2018
31 December 31 December 30 June
Figures in Rand Note(s) 2018 2017 2018
Unaudited Unaudited Audited
Assets
Non-Current Assets
Property, plant and equipment 7,674 13,814 10,744
Investment in subsidiary 8 12,534 - 12,534
20,208 13,814 23,278
Current Assets
Other receivables 1,285,375 162,213 544,909
Current tax receivable 2,978 - 2,978
Cash and cash equivalents 19,471,527 37,776,257 31,468,938
20,759,880 37,938,470 32,016,825
Total Assets 20,780,088 37,952,284 32,040,103
Equity and Liabilities
Equity
Share capital 48,741,085 48,741,085 48,741,085
Accumulated loss (30,473,063) (13,099,495) (18,463,692)
18,268,022 35,641,590 30,277,393
Liabilities
Current Liabilities
Trade and other payables 2,512,066 2,233,088 1,762,710
Current tax payable - 77,606 -
2,512,066 2,310,694 1,762,710
Total Equity and Liabilities 20,780,088 37,952,284 32,040,103
Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income
six months six months year
ended ended ended
31 December 31 December 30 June
Figures in Rand Note(s) 2018 2017 2018
Unaudited Unaudited Audited
Foreign exchange gains 2,749 26,077 22,736
Other operating expenses (12,545,198) (7,861,949) (13,973,232)
Operating loss (12,542,449) (7,835,872) (13,950,496)
Interest received 759,653 1,227,309 2,263,978
Loss before taxation (11,782,796) (6,608,563) (11,686,518)
Taxation 6 (226,574) (354,037) (640,280)
Loss for the six months (12,009,370) (6,962,600) (12,326,798)
Total comprehensive loss for the six months (12,009,370) (6,962,600) (12,326,798)
Loss per share
Per share information
Basic loss per share (cents) 4 (228.50) (132.48) (234.54)
Diluted loss per share (cents) 4 (228.50) (132.48) (234.54)
There are no dilutive instruments in issue for all periods presented.
Unaudited Condensed Consolidated Statement of Changes in Equity
Figures in Rand Share capital Accumulated Total Equity
loss
Balance at 01 July 2017 (audited) 48,741,085 (6,136,894) 42,604,191
Total comprehensive loss for the six months - (6,962,600) (6,962,600)
Balance at 31 December 2017 (unaudited) 48,741,085 (13,099,494) 35,641,591
Total comprehensive loss for the six months - (5,364,198) (5,364,198)
Balance at 30 June 2018 (audited) 48,741,085 (18,463,692) 30,277,393
Total comprehensive loss for the six months - (12,009,370) (12,009,370)
Balance at 31 December 2018 (unaudited) 48,741,085 (30,473,062) 18,268,023
Unaudited Condensed Consolidated Statement of Cash Flows
six months six months year
ended ended ended
31 December 31 December 30 June
Figures in Rand Note(s) 2018 2017 2018
Unaudited Unaudited Audited
Cash flows from operating activities
Cash used in operations 5 (12,530,490) (14,433,365) (21,397,992)
Interest received 759,653 1,227,309 2,263,978
Tax paid (226,574) (286,280) (653,107)
Net cash outflow from operating activities (11,997,411) (13,492,336) (19,787,121)
Cash flows from investing activities
Investment in subsidiary - - (12,534)
Net cash outflow from investing activities - - (12,534)
Cash flows from financing activities
Repayment of loans from related parties - (1,323,435) (1,323,435)
Net cash outflow from financing activities - (1,323,435) (1,323,435)
Net decrease in cash and cash equivalents (11,997,411) (14,815,771) (21,123,090)
Cash and cash equivalents at the beginning of the period 31,468,938 52,592,028 52,592,028
Cash and cash equivalents at the end of the period 19,471,527 37,776,257 31,468,938
Notes to the Unaudited Condensed Consolidated Financial Statements
six months six months year
ended ended ended
31 December 31 December 30 June
Figures in Rand 2018 2017 2018
Unaudited Unaudited Audited
1. Basis of preparation
The unaudited condensed consolidated interim results are prepared in accordance with International Financial Reporting
Standard (''IFRS''), the provisions of the JSE Listings Requirements for interim reports, and the requirements of the
Companies Act of South Africa. The Listings Requirements require interim reports to be prepared in accordance with and
contain the information required by IAS 34 Interim Financial Reporting, as well as the SAICA Financial Reporting Guides
as issued by the Accounting Practices Committee and the Financial Pronouncements as issued by the Financial
Reporting Standards Council.
The condensed consolidated interim results for the six months ended 31 December 2018 have not been audited or
reviewed and have been prepared under the supervision of ECMB Kikonyogo in his capacity as the acting finance
director.
The accounting policies are in terms of IFRS and are consistent with those used in the preparation of the consolidated
annual financial statements for the year ended 30 June 2018.
2. Subsequent events
On 27 March 2019 the Board announced that the Company has received notice of termination from the Seller in relation to
the Sale and Purchase Agreement, owing to delays in achieving completion of the Viable Acquisition. This is a non-
adjusting event in terms of IAS 10. As at the date of the release of the Unaudited Condensed Consolidated Interim
Results, a reasonable estimate of the effect of this event cannot be made.
3. Going concern
The interim results have been prepared on the going concern basis of accounting. The directors have reviewed the
Group`s cashflow forecast for the period up to 31 December 2019 and in the light of this review and the current financial
position they are satisfied that the Company has adequate resources to continue in operational existence for the
foreseeable future.
Shareholders are advised that should the Company not complete a viable acquisition on or before 30 June 2019, the
Listings Requirements require it to secure shareholder approval to begin a voluntary winding up of the Company. The
Board will make an announcement in due course on the way forward.
4. Basic and headline loss per share
Basic loss per share is determined by dividing the loss attributable to the ordinary equity holders of the Company by the
weighted average number of ordinary shares outstanding during the period.
Loss for the year (12,009,370) (6,962,600) (12,326,798)
Headline loss (12,009,370) (6,962,600) (12,326,798)
Number of shares in issue 5,255,680 5,255,680 5,255,680
Weighted number of shares 5,255,680 5,255,680 5,255,680
Basic and diluted loss per share (cents) (228.50) (132.48) (234.54)
Basic and diluted headline loss per share (cents) (228.50) (132.48) (234.54)
Basic loss per share is based on losses after tax of R12,009,370 (31 December 2017: R6,962,600 ; 30 June 2018:
R12,326,798) and weighted average ordinary shares of 5 255 680 at 31 December 2018 (31 December 2017:
5 255 680 ; 30 June 2018: 5 255 680).
During the period there were no potential share conversions that could result in any additional shares being issued.
Therefore, the diluted loss per share and diluted headline loss per share equalled the basic loss per share.
5. Cash used in operations
Loss before taxation (11,782,796) (6,608,563) (11,686,518)
Adjusted for:
Depreciation 3,070 3,070 6,140
Interest income (759,653) (1,227,309) (2,263,978)
Changes in working capital:
Other receivables (740,466) 931,387 548,691
Trade and other payables 749,355 (7,531,950) (8,002,327)
(12,530,490) (14,433,365) (21,397,992)
6. Taxation
South African normal taxation
Current
Local income tax 226,574 354,037 640,280
Reconciliation of the tax expense
Reconciliation between accounting profit/(loss) and tax expense:
Accounting loss (11,782,796) (6,608,563) (11,686,518)
Tax at the applicable tax rate of 28% (3,299,183) (1,850,398) (3,272,225)
Tax effect of adjustments on taxable income
Non-deductible expenses in terms of S11(a) 3,538,608 2,191,226 3,847,403
Leave pay provision (12,851) 13,209 65,102
226,574 354,037 640,280
7. Related parties
Relationships
Trodera Proprietary Limited ("Trodera'')
Trodera is the investment vehicle through which the two management founders of AEP, indirectly hold their shares
in AEP. The entity`s equal shareholders are AEP directors, ECMB Kikonyogo and N Gugushe.
Destiny Corporation Management Services Proprietary Limited ("DCMS")
DCMS is the contractually appointed Management Company of AEP, and therefore has significant influence. The
executive directors of DCMS, ECMB Kikonyogo and N Gugushe, are also the executive directors of AEP. The
shareholders of DCMS are Kaemelon with 67% and both the executive directors of DCMS, ECMB Kikonyogo and
N Gugushe holding 16.5% each, respectively.
Kaemelon Proprietary Limited ("Kaemelon")
Kaemelon has a 67% shareholding in DCMS. The directors of Kaemelon, ECMB Kikonyogo and N Gugushe, are also the
executive directors of DCMS. The shareholders of Kaemelon are Destiny Corporation Energy Proprietary Limited ("DCE")
with 51% and Thesele Group Proprietary Limited with a 49% shareholding.
Thesele Group Proprietary Limited ("Thesele")
Thesele has a 49% shareholding in Kaemelon. Thesele has three non-executive directors on the Board, being TP Leeuw,
SM Moloko and ONW Petersen.
Related party transactions
Trodera
Shareholder hosting fees 13,800 45,624 59,364
Theses are bank charges incurred by Trodera for holding its shares in AEP in custody with Rand Merchant Bank
("RMB"), as part of the Listings Requirements of a SPAC. Theses bank charges were on-charged to AEP.
DCMS
Management fees 900,000 900,000 1,800,000
Recovered costs - - 534,131
The recovered costs include lease rental recoveries and legal fee recoveries on overruns.
Thesele
Office lease rental expense 101,909 138,434 182,733
The Company entered into a 12 month lease rental agreement with Thesele on 01 August 2017. Since 31 July
2018, the lease was rolled over on a month-to-month basis on the same terms and conditions as the initial lease.
Kaemelon
Recovered costs - - 262,848
The recoveries relate to a Due Dilligence done on a potential viable acquisition target. Theses costs were fully
recovered from Kaemelon by 30 June 2018.
The related party transactions are at arm`s length.
8. Investment in subsidiary
Direct - unlisted
Name of company Held by % holding and % holding and % holding and Carrying Carrying Carrying
voting power voting power voting power amount amount amount
31 December 31 December 30 June 31 December 31 December 30 June
2018 2017 2018 2018 2017 2018
AEP Energy Africa International Limited AEP Energy Africa Limited 100% - 100% 12,534 - 12,534
(Mauritius)
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