Kibo Strategic IPO Spinout

RNS Number : 0469B

Kibo Energy PLC

29 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: 29 September 2022

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

Kibo Advances Corporate Strategy with Strategic IPO Spinout

Kibo Energy PLC (AIM: KIBO; AltX: KBO), the renewable-energy-focused development company, is pleased to announce that the Company is proceeding with a proposal for an Initial Public Offering ('IPO') to be named Ultimate Sustainable Energy Ltd ('USE') in advancing its Corporate Strategy towards significant renewable/clean energy developer status. The Company will furthermore seek admission to the Alternative Investment Market ('AIM') of the London Stock Exchange ('LSE') for the IPO. The IPO will seek to raise sufficient funds to develop the Company's portfolio of renewable/clean energy generation projects, thereby supporting the Company's strategic intent to significantly advance and accelerate the development and execution of its sustainable, renewable energy strategy.

Highlights:

· Kibo's renewable/clean energy generation projects to be listed on AIM as a new company named USE by Q4 2022/Q1 2023

· Post-admission, Kibo expects to hold a significant majority interest of ~75% in USE, maintaining a strategic interest post the initial fundraise and admission, to ensure continued upside from future developments

· Admission seeks to capitalise on strategic growth and funding opportunities identified in the renewable/clean energy generation market

· Anticipated fundraise of c. £7-10 million for USE to take place alongside admission - funds raised will be used to advance the short- to medium-term project development of a portfolio of renewable/clean energy generation projects to achieve financial close

· Projects currently earmarked for inclusion in the IPO portfolio are:

o Current waste-to-energy projects in South Africa and the UK

o All biofuel projects, inclusive of utility-scale projects in Tanzania, Botswana and Mozambique (Note: Projects in Tanzania, Botswana and Mozambique refer to the historic coal-power projects currently the subject of active investigation for conversion into renewable energy projects by utilising biofuel)

· An admission document for USE will be published as part of the listing process.

CEO of Kibo Energy, Louis Coetzee, says: "This is an exciting time for the growth of Kibo Energy, with this IPO unlocking the true value and potential of the Company's sustainable, renewable energy assets. This includes two waste-to-energy projects in South Africa, the first of which is a 2.7 MW facility in Gauteng and the second which comprises a target of 20 MW, and the Southport project in the United Kingdom of 10 MW electric power with 5.5m m³ biogas (i.e., green gas) plus a planned 2 MW battery storage. Further to this, the Company is in the advanced stages of disposing of its coal assets while retaining the associated energy projects that target the innovative biofuel technology on which the Company has carried out extensive work over the past few months (see RNS dated 25 August 2022).

"The market opportunities, government support and technical innovation in both South Africa and the UK are evolving and are at the ideal stage to position USE, and thus Kibo, as influential innovators in the renewable/clean baseload energy generation sector. Most notably, Kibo will retain a controlling interest (c. 75%) in USE that will allow shareholders to benefit from future USE developments while attracting new investor bases, including impact investors seeking companies that prioritise ESG outcomes. Progress on the development of USE's project portfolio is further expected to have a positive social, environmental and economic impact on the communities where it operates, and we look forward to updating the market in this regard and on what we believe are very robust financials underpinning the USE IPO-portfolio as well as potential value distribution opportunities to Kibo's shareholders."

Impact of Admission on Kibo Strategy

As per the Company RNS dated 19 April 2021, Kibo's primary strategic focus remains the acquisition and development of a portfolio of sustainable, renewable energy assets to capitalise on the global renewable/clean energy revolution. With the available market opportunities, government support and technical innovation in renewable/clean energy in South Africa and the United Kingdom, the Company believes this is the ideal time to position itself as an influential leader in the sector. This is evidenced by Kibo's large knowledge base and experience in the renewable energy sector, developed in recent years through its renewable energy solution and Long Duration Energy Storage('LDES') solution, which will also be used for integration with and planned transformation of its current large utility fossil fuel-based projects into renewable/clean energy projects. Furthermore, the planned admission will provide strategic growth and development opportunities for both Kibo and USE and will enable each company to focus on and deliver its primary strategic objectives and clearly defined core business.

The admission of USE will result in the following key advantages:

· Greater visibility on the valuation of Kibo's strategic portfolio of assets, which also includes c. 21% interest in Katoro Gold PLC ('Katoro') and 61.27% in Mast Energy Developments PLC ('MED');

· Visibility for USE and thus Kibo, as a leading innovator in the renewable/clean baseload energy generation sector;

· Greater investor diversification and an opportunity to target new investor bases, such as impact investors seeking companies that prioritise environmental, social and governance ('ESG') outcomes, and those less interested in African risk-reward opportunities;

· An opportunity to raise short- to medium-term development capital requirements from the proposed fundraise, which will generate USE's first revenue stream within 18 months; and

· Synergistic growth opportunities with Kibo's core renewable/clean energy projects in South Africa and the UK.

Background and Commercial Rationale for Admission

The USE business strategy is to acquire, develop and operate a comprehensive portfolio of renewable/clean baseload energy generation projects, exploiting the global step-change towards renewable/clean energy. Kibo's current projects to be included in USE's IPO portfolio are:

· waste-to-energy ('WTE') and alternative and renewable/clean energy generation projects in South Africa and the UK (c. 25 MW);

· the Company's existing three utility-scale baseload generation projects in Botswana, Mozambique and Tanzania (c. 900 MW in aggregate) on the basis of the planned transformation of these into renewable/clean energy projects as discussed above.

Kibo will retain the remainder of its project portfolio, which includes:

· exclusive rights to long-term energy storage technology and solutions via the Enerox GmbH ('CellCube') Framework Agreement ('FA') and associated LDES projects;

· majority interest in National Broadband Solutions ('NBS'), which has the exclusive right to a portfolio of long-duration energy storage projects in South Africa (RNSs dated 30 May 2022 and 7 July 2022);

· 61.27% interest in Mast Energy Developments PLC; and

· 21% interest in Katoro Gold PLC, amongst others.

Kibo's current waste-to-energy and biofuel portfolio comprise a substantial set of diversified projects that are all in an advanced stage of development (all at bankable feasibility level), with significant inherent value. This will provide USE with a robust and well-developed IPO portfolio that can be advanced to financial close and, ultimately, into production and revenue generation within 18 months from IPO. Kibo expects that the utility-scale projects could reach the same status within 18 to 24 months thereafter, if the current commercial scale test work demonstrates positive results. This commercial scale testing follows on from the completion of positive bench-testing work. Post IPO, USE will also benefit from the strategic technical support, services and capabilities that will remain in the Kibo portfolio. Kibo will in turn unlock significant shareholder value via the IPO and also add another significant potential revenue stream to its continuously increasing number of current and future diversified revenue streams.

Background to Renewable/Clean Energy

The move for renewable/clean energy is spearheaded by the United Nations' Sustainable Development Goals ('UN SDGs'), specifically SDG 7, Ensure access to affordable, reliable, sustainable and modern energy for all.* Fossil fuels, such as coal and gas, have long been used for energy generation and are the largest contributor to global climate change, accounting for more than 75% of global greenhouse gas ('GHG') emissions and nearly 90% of carbon dioxide emissions.** In their commitments to the UN SDGs, specifically reversing the impacts of climate change, reducing emissions by almost half by 2030 and reaching net zero by 2050, countries across the world, including the UK, are seeking to end their reliance on fossil fuels and invest in alternative sources of energy that are sustainable, clean, accessible and affordable. In South Africa, there is also an increased demand for private electricity generation where the state utility, Eskom, is unable to meet this demand.

This announcement contains inside information as stipulated under the Market Abuse Regulations (EU) no. 596/2014.

Notes:

*https://sdgs.un.org/goals/goal7

** https://www.un.org/en/climatechange/raising-ambition/renewable-energy

**ENDS**

For further information please visit www.kibo.energy or contact:

Louis Coetzee	[e-mail]	Kibo Energy PLC	Chief Executive Officer
Andreas Lianos	[phone]	River Group	JSE Corporate and Designated Adviser
Claire Noyce	[phone]	Hybridan LLP	Joint Broker
Damon Heath	[phone]	Shard Capital Partners LLP	Joint Broker
Bhavesh Patel / Stephen Allen	[phone]	RFC Ambrian Ltd	NOMAD on AIM
Zainab Slemang van Rijmenant	[e-mail]	Lifa Communications	Investor and Media Relations Consultant

Johannesburg

29 September 2022

Corporate and Designated Adviser

River Group

 

END

 

 

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