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Kibo Energy acquires 100% interest in Bordersley reserve power generation project

Kibo previously held a 60% interest in the project through its MAST Energy subsidiary, but it has agreed to issue shares to the other MAST shareholders in return for a 100% interest
MED remains responsible for managing the development of Bordersley

Kibo Energy PLC (LON:KIBO) has moved to take a direct 100% interest in the Bordersley reserve power generation project acquired by its MAST Energy Developments subsidiary last week.

The AIM-quoted company already owned a 60% interest in the project through its 60% stake in MAST, which acquired the 5-megawatt gas-fuelled plant for £175,000 last week.

READ: Kibo’s MAST Energy subsidiary finalises 5-year PPA at Bordersley power project

Kibo is now paying up to £2.4mln in shares to acquire the remaining 40% interest.

“We are delighted to take a direct 100% interest in Bordersley, having significantly de-risked this shovel-ready site and met all our working capital requirements for the next 18 to 24 months,” said Kibo chief executive Louis Coetzee.

“With the right partners also in place, including EPC contractor, owners engineer and a power purchase agreement with Statkraft, we anticipate commencing commercial commissioning at the end of Q1 2020; 100% of revenues generated from Bordersley will now flow to the Kibo bottom line and make a marked contribution to the group's ongoing funding requirements.”

Shares issued at a high premium

In return for the additional stake, Kibo will issue 46.1mln shares to MAST’s other shareholders at a price of 5.25p apiece – five times Tuesday’s closing price.

The shares will be issued in five separate tranches, with each tranche subject to various construction milestones.

As the sole interested party in Bordersley, Kibo will receive all of the revenue generated from Bordersley, which is due to be commissioned in the first quarter of 2020.

The company expects revenues from the project to “contribute significantly” to Kibo’s ongoing funding requirements.

Kibo shares surged 28.3% to 1.35p shortly after the news broke.

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