Kibo Energy, the renewable energy-focused development company, announced yesterday that it agreed to dispose of its coal interest in a Botswana coal-based power project.
In a statement, the group said under its declared strategy to divest of all its coal assets, Kibo had entered into a definitive share sale agreement with Shumba Energy for the sale of the company’s remaining 35% equity holding in Kibo Energy Botswana in which Kibo held its interest in the coal resources associated with the project.
According to the group, Kibo Energy Botswana consists of the Mabasekwa coal-to-power project, which had a carrying value of nil as of December 31, 2022, with an associated loss before tax of £3.56 million (R83m), largely reflecting a full impairment of the carrying value in that period.
Kibo Energy CEO Louis Coetzee said: “This sale is in line with Kibo’s commitment to its renewed strategy to acquire and develop a portfolio of sustainable renewable energy assets and implement appropriate disposal and disinvestment or repositioning of all hydrocarbon and coal-based assets.
“Our next aim is to progress ongoing negotiations for the disposal of the company’s Tanzanian coal assets and we will update the market in this regard in due course.”
The sale to Shumba is for a consideration of $375 000 (R7.2m), which is payable using ordinary shares in the authorised unissued share capital of Shumba, listed on the Botswana Stock Exchange (BSE), calculated on the basis of the volume-weighted average price of shares in Shumba as traded over 30 trading days prior to the issue date, and rounded up or down to the nearest number of whole shares.
Kibo said the disposal of the company’s coal interest in the project was part of its declared strategy to divest from all hydrocarbon and coal-based assets and contributes to the company’s ongoing actions to ensure that the company continues to have access to sufficient funding resources if and when required.
“In this regard, the company is also continuously in discussions with various potential funding sources to ensure that the company has sufficient means for its ongoing working capital needs,” it said.
Last week, Kibo said that during the first half of 2023, the group had incurred losses in the current financial and previous periods, which had caused uncertainty as it faced liquidity problems.
In its interim results for the six months ended June 30, 2023, the company said the losses were largely attributable to the short-term liquidity position the group found itself in as a result of the significant capital required to develop projects that exceed cash contributed to Kibo Energy by the capital contributors.
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