TIDMKIBO
RNS Number : 1174A
Kibo Energy PLC
21 September 2022
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: 21 September 2022
Kibo Energy PLC ('Kibo' or the 'Company')
Kibo Bolsters its Renewable Energy Strategy with Acquisition of
Advanced UK Waste to Energy Project
Kibo Energy PLC (AIM: KIBO; AltX: KBO) ('Kibo' or the
'Company'), the renewable energy focused development company, is
pleased to announce that it has signed a definitive Share Purchase
Agreement (the 'SPA') to acquire a 100% interest in a waste
reception, Anaerobic Digestor ("AD") and CHP power plant
('Southport' or 'the Project') at Merseyside, United Kingdom.
The acquisition of Southport, a 12MW waste-to-energy project in
the UK, is in line with the Company's refocused strategy to acquire
and develop an energy portfolio centered around sustainable
renewable / clean energy solutions and opportunities, as detailed
in a Company RNS dated 19 April 2021.
Highlights of the Southport SPA:
-- Kibo Energy will acquire 100% of the total issued share
capital of Shankley Biogas Ltd ("Shankley"), which is developing
the Project and who will also be responsible for the construction
and operation of the Project.
-- Southport, an AD and power plant at Mersey Side in the UK,
comprises an 80,000 tonne waste-reception center, with AD
technology that is set to produce 5.5 million m (3) of bio-methane
per annum with a 10 MW installed Combined Heat and Power ("CHP")
plant plus planned 2MW battery storage.
-- Project rights include all technology license agreements,
equipment supply and maintenance agreements, and related project
documentation.
-- The transaction consideration is GBP600,000, payable as
GBP350,000 in ordinary shares of Kibo at an issue price equal to
the 20-day volume-weighted average price ('VWAP') of the 20 days
preceding the closing date of the acquisition, and GBP250,000 in
cash to be paid as GBP50,000 within 14 days of the closing date, an
amount of GBP75,000 on the earlier of the date on which the new
board of directors of Shankley shall have approved a final
financial model and project investor memorandum for debt and
project funding following the closing date, or on financial close,
and GBP125,000 on reaching financial close.
-- Shankley Biogas Ltd has negotiated a Power Purchase Agreement
('PPA') and a Gas Purchase Agreement ('GPA') term sheet on
favourable terms with a blue-chip buyer.
-- The Project has full planning permission as well as grid and
gas connection points already in place.
-- Based on independent financial estimates, prepared by
reputable and appropriately accredited consulting firm, the
projected valuation metrics for the Project are summarised as
follows:
- Internal rate of return ('IRR') of c. 22.78%
- Net Present Value (6%) ('NPV') of c. GBP47 million
- Net Asset Value ('NAV') of c. GBP22 million
- Projected average annual revenue of c. GBP24 million over a
25-year term.
- Estimated Operating margin c. 38%
- Capital estimated of c. GBP.35m
The above financial projections have been provided by Shankley
and its consultants. Whilst these figures have been reviewed by
Kibo, following completion of the transaction further review is
ongoing and these estimates remain subject to change.
Louis Coetzee, CEO of Kibo Energy, says: "We believe this
opportunity supports our strategic intent to significantly advance
and accelerate the development of the Company's renewable energy
portfolio in the United Kingdom. The project further deliberately
and actively drives Kibo's transition from fossil fuel-based energy
solutions to sustainable renewable energy solutions and will now
bring our waste-to-energy ('WTE') portfolio to an aggregate of
c.140,000 MWh per annum, with this entire capacity expected to go
into production over the next 12 to 18 months. The Company
furthermore expects to further advance its renewable / clean energy
portfolio with the ongoing work related to converting its existing
energy projects in Tanzania, as announced in a Company RNS dated 27
May 2022.
This is indeed an exciting new chapter in the business, one that
aligns with the UK's move to an electricity system that is secure,
affordable and employs increasing amounts of variable renewable
energy generation options, as stated in the 2016 report by the
Carbon Trust, in collaboration with the Imperial College, 'An
Analysis of Electricity System Flexibility for Great Britain'".
The Project
Southport is located at Merseyside in Northwest England, United
Kingdom, and comprises a waste-reception centre designed to accept
up to 80,000 tonnes of 'trommel fines' (also known as municipal
solid waste or 'MSW fines') per annum. The waste reception centre
and power plant utilise anaerobic digestion technology that will
create 5.5 million cubic metres (m (3) ) of bio-methane combined
with a 10 MW CHP plant. The primary purpose of the plant will be to
produce an organic fraction from the incoming waste, which will be
processed through anaerobic digestion to generate bio-methane that
will, in turn, be exported to the UK's national gas grid network.
The CHP plant will generate electricity to be utilized for internal
usage of the AD facility (c.2 MW) and to be exported to the local
grid (c.8 MW). Southport is also planning a 2MW battery storage
facility.
The Transaction
The Company continues to advance its strategy to rapidly grow
its renewable energy portfolio and capitalise on sustainable growth
that will deliver long-term value for shareholders. In line with
this, the Company has signed an SPA to acquire the Southport waste
gasification and power plant.
Under the terms of the Agreement, Kibo Energy will acquire 100%
of Shankley Biogas Ltd, including all its rights and obligations
for the development, construction and operation of Southport. The
purchase consideration is GBP600,000 with GBP350,000 payable as
ordinary shares of the Company at an issue price equal to the
20-day volume-weighted average price ('VWAP') of the 20 days
preceding the closing date of the acquisition. The balance of
GBP250,000 payable in cash, is to be paid as GBP50,000 within 14
days of the closing date, an amount of GBP75,000 on the earlier of
the date on which the new board of directors of Shankley shall have
approved a final financial model and project investor memorandum
for debt and project funding following the closing date, or on
financial close, and GBP125,000 on reaching financial close.
Project rights include all technology license agreements, all
equipment supply and maintenance agreements, held by Shankley
Biogas Ltd. This includes the agreed projects configuration ('scope
of work') with Anaergia Ltd, a global technology and process
engineering company that provides integrated solutions and
technologies for the processing of waste streams. The scope of work
includes the full engineering, procurement and construction of the
Southport plant based on a fixed-price, lump-sum contract for the
capital works scope and a separate minimum five-year duration
contract to technically operate the Southport plant in its
entirety.
In addition to negotiating a Power Purchase Agreement ('PPA')
and a Gas Purchase Agreement ('GPA') term sheet on favourable terms
with a blue-chip buyer, Shankley Biogas Ltd has already secured
import and export grid connection points for both gas and
electricity. The Project furthermore has planning permission in
place that considers the ecological, safety and sustainable
improvements as well as development of the local environment.
Shankley Biogas Ltd as at 31 December 2020 had total assets of
GBP66,339 and total net liabilities of GBP650. Losses of GBP750
were noted in the 12 months to 31 December 2020.
Important Information for Shareholders
Kibo shareholders should be aware that all financial numbers as
stated herein remain subject to change until such a time as actual
production figures are available, following a suitable period of
steady state operation. The projected returns are also subject to
Project funding being secured on terms in line with the Board's
current expectation on equity, debt levels and rates, in which case
the Project's returns, as set out above, could be materially
impacted.
**S**
This announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014 and is
announced in accordance with the Company's obligations under
Article 17 of the specified Regulation.
For further information please visit www.kibo.energy or
contact:
Louis Coetzee info@kibo.energy Kibo Energy PLC Chief Executive Officer
Andreas Lianos +357 99 53 1107 River Group JSE Corporate and Designated
Adviser
-------------------------------- ----------------------- -----------------------------
Claire Noyce +44 (0) 20 3764 2341 Hybridan LLP Joint Broker
-------------------------------- ----------------------- -----------------------------
Damon Heath +44 207 186 9952 Shard Capital Partners Joint Broker
LLP
-------------------------------- ----------------------- -----------------------------
Bhavesh Patel +44 20 3440 6800 RFC Ambrian Ltd NOMAD on AIM
/ Stephen
Allen
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Zainab Slemang zainab@lifacommunications.co.za Lifa Communications Investor and Media Relations
van Rijmenant Consultant
-------------------------------- ----------------------- -----------------------------
Johannesburg
21 September 2022
Corporate and Designated Adviser
River Group
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END
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