Kinetiko Energy Ltd (ASX:KKO) has received firm funding commitments from a private South African institution to raise A$2.95 million (before costs) through the exercise of an option.
Strategic Investment Phefo Power (Pty) Ltd, a South African energy investment institution, is behind the move.
Phefo’s stakeholders comprise leading South African oil and gas executives and this represents the largest investment by private South African institutions to date.
KKO sees the exercise of the option as demonstrating strong domestic support for its vision to become a major energy solution for South Africa. The gas explorer and developer is focused on advanced shallow conventional gas and coal bed methane (CBM) in South Africa.
A valued supporter
Phefo has been a valued supporter of KKO, having participated in capital raisings in April and October 2022.
The option will be exercised for further funding at $0.09 per share to raise A$2.9 5million (before costs), with the funds to put KKO in a strong cash position for 2023.
Funds will be used to accelerate exploration and gas resources growth.
About the option
KKO granted Phefo an option to subscribe for a further R35 million at a price that is the greater of the 14 days VWAP of its shares at the time the option is exercised or $0.09 pursuant to a subscription agreement executed in October 2022.
The option expires on February 28, 2023.
32,802,220 ordinary shares in KKO will be issued under the placement pursuant to its available 15% placement capacity.
Ordinary fully paid shares in KKO issued under the option will rank equally with the its existing shares on issue.