7th Sep 2020 09:41
(Alliance News) - Kibo Energy PLC said Monday its UK subsidiary Sloane Developments Ltd has agreed heads of terms for the agreement to acquire a flexible gas power project in the UK for GBP1.7 million.
The project is a freehold site with established infrastructure including nine megawatts of grid export connection and several operating unit in situ and live.
Kibo said the project also has an attractive economic profile. A third-party financial modelling exercise based on 7.5 megawatts generating capacity showed a post-tax annual revenue stream over the project life of GBP7.3 million and internal rate of return of between 19% and 21%.
The acquisition is conditional on Sloane completing its listing on the London Stock Exchange. Sloane will pay GBP1.5 million in cash once the listing is completed, and GBP200,000 through the issue of shares in Sloane.
In late July, Kibo said it was seeking admission to the London Stock Exchange for Sloane Developments Ltd as Mast Energy Developments PLC, the listing of which is expected to be in the fourth quarter of 2020.
Other conditions include the completion of due diligence and other regulatory approvals. Kibo did not disclose the exact location of the project.
"The acquisition of this 9MW gas power project will represent the second production/shovel-ready site in our subsidiary's growing portfolio of flexible power plants in the UK. In addition, potential exists to optimise synergies between the acquisition site and Bordesley resulting in significantly improved site economics," said Chief Executive Officer Louis Coetzee.
"Together with Sloane's upcoming listing, this acquisition will provide an outstanding platform from which to take full advantage of the opportunity that has been identified in the Reserve Power market, the fastest growing energy sector in the UK," Coetzee added.
Shares in Kibo Energy were 10% higher at 0.33 pence in London, while its Johannesburg shares were 29% higher at ZAR0.09 on Monday.
By Dayo Laniyan; [email protected]
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