JSE-listed Kibo Energy’s UK-based energy assets operator yesterday said the kick-starting of work on the second phase of its Pyebridge programme will boost revenues and profitability.
This comes as Kibo’s subsidiary, Mast Energy, has officially launched work on the Pyebridge Power second phase after signing an engineering works contract with Cooper Ostlund, a UK contractor, for the full long-block overhaul of one genset, which comprises of an engine and power generator.
The contract with Cooper Ostlund also encompasses “essential improvements” to the site.
“The expected timeline to completion of the work and commercial operations date of the refurbished genset is around eight weeks,” said Kibo.
Kibo CEO Pieter Krügel said costs for these works, which cover the overhaul of one genset, will be funded under a new funding agreement reached by Mast and RiverFort.
Krügel said that with Pyebridge enlisted as the borrower pursuant to this, the board of Mast has now agreed with RiverFort on a second advance amounting to a gross total of £1,177,107 (about R27.2 million).
“We are pleased to have officially initiated the second phase work programme. It will see Pyebridge generating at optimum capacity as soon as the work has been completed, boosting revenues and profitability,” Krügel said.
He added that a replacement engine for the first overhaul had already been secured and ready to ship, resulting in an accelerated timeline to get the overhauled genset into production and generating additional revenue sooner.
During the overhaul of the genset, it is expected that the site’s other two gensets will remain operational and will continue to generate revenue.
The Pyebridge plant will continue to receive its current capacity market contract income, mainly from the UK government.
On completion of the overhaul of the first genset, Pyebridge will have three gensets operating and generating at optimum capacity, the company explained.
“The plan is to overhaul the other two gensets in due course, in order to maximise full reliability, efficiency and revenue generating ability in the most cost-efficient manner,” Krügel said.
Mast had also entered into a partial settlement deed with RiverFort Global Opportunities in relation to the re-profiled balance due under a prior agreement.
Under terms of the settlement, Krügel will purchase from RiverFort up to £325 000 of the re-profiled balance due.
“In accordance with the terms of the re-profiling agreement, the capitalised balance will be converted into 162,500,000 new MED ordinary shares of 0.1p at a conversion price of 0.20p per share by Krügel. The capitalised balance had now been transferred and assigned to Krügel,” said Mast in its statement.
Following the acquisition and conversion, the remaining outstanding balance due under the re-profiling agreement amounts to £477 005, with the Mast CEO agreeing to dispose of the subscription shares “to new investors arranged by the company’s broker, Novum Securities Limited, at the same price” per share of 0.20p.
“As part of the Placing agreement with Novum, the company will grant to Novum or associates broker warrants valid for three years from the issue date which shall give Novum the right to subscribe for one ordinary share for each warrant issued.”
As part of the Conversion and Placing, Mast’s major shareholder, Kibo Energy, agreed to a hard lock-in exercise of its existing shares in Mast for a period of three months.
BUSINESS REPORT