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City financier Sanderson ups stake in Kibo Energy as it converts minority interest in Mbeya

Sanderson’s stake in Kibo has risen from 8.2% to 23.4% after it converted its 2.5% minority stake in the Mbeya Coal to Power project in Tanzania into Kibo shares

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Sanderson will retain a 0.3% royalty interest in Mbeya, capped at US$2mln

Corporate financier Sanderson Capital has converted its 2.5% minority interest in Kibo Energy PLC’s (LON:KIBO) Mbeya Coal to Power project (MCPP) in Tanzania into Kibo shares.

In return for giving up its 2.5% stake, Sanderson has been issued with 126.44mln Kibo shares, valuing Mbeya at £66mln.

READ: Kibo looking for clarification as TANESCO rejects tender bid

The new shares mean Sanderson, which will retain a 0.3% royalty on future profits from Mbeya, now owns a 23.4% stake in AIM-quoted Kibo.

Sanderson has the option to appoint a non-executive director to the Kibo board.

Should it look to sell down any of its stake, Sanderson will have to give Kibo five days’ notice.

This will allow Kibo’s brokers time to find buyers for the shares which should help to ensure that trading in the stock continues as normal.

As part of the conversion, Sanderson has agreed to provide up to £500,000 of short-term financing, plus up to a further £2.23mln (US$2.94mln) in additional financing. Kibo is not obliged to draw down any of the available funding.

‘True cornerstone institutional investor’

“We are very pleased with the agreement reached with Sanderson to convert its underlying interest in Mbeya Development into Kibo PLC shares,” said chief executive Louis Coetzee.

“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.”

Kibo shares jumped 21% to 1.15p in late-morning trading on Tuesday.

Quick facts: Kibo Energy PLC

Price: 0.275 GBX

Market: LSE
Market Cap: £3.64 m

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