Kibo Energy announces that its 60% owned subsidiary, MAST Energy Developments (MED) who develops and operates flexible power plants has initiated commercial discussions.
- MED has today executed a Sale and Purchase Agreement (SPA) to acquire Bordersley Power (Bordersley), a Special Purpose Vehicle (SPV), from Balance Power Projects (Balance)
- Bordersley will comprise a 5 MW gas-fueled power generation plant, supported by: o an option to lease the land which would be the project site to a Grid Connection Offer; and a Gas Connection Offer
- Completion of the acquisition is subject to satisfaction or waiver of the Conditions Precedent by the Longstop Date of 14 to 21 working days from the date of SPA execution:
- Novation of the Grid Connection Offer and Connection Offer Novation to Bordersley
- Completion of the Option to Lease novation to Bordersley
- Completion of a deed of variation of the Option for Lease pursuant to which SWB Power is replaced as Guarantor under the Lease by a person nominated by the Buyer.
- Receipt of various planning and title permissions and reports o Comprehensive technical and economic Due Diligence performed to MED’s satisfaction
- If the Conditions Precedent have not been satisfied or waived on or before the Longstop Date the SPA shall terminate on the day after the Longstop Date unless an extension is mutually agreed
- Completion shall take place on the fifth business day after the fulfilment or waiver of the last of the Conditions Precedent or any other date agreed by the Seller and the Buyer in writing
- MED will pay Balance GBP175,000 in cash consideration and reimburse Balance GBP2,000 in costs related to the Gas Connection Offer; and
- The existing directors and officers of Bordersley to resign, with Louis Coetzee and Pieter Krügel to be appointed as directors of Bordersley
- Warranties, representations and undertakings typical of a transaction of this nature are included
- Engineering, Procurement and Construction (EPC) proposals have been received and multinational Clarke Energy has been selected as the preferred EPC contractor, and peaking power generation construction specialists Encora Energy selected as preferred Owners Engineer
- Subject to successful financial close and notice to proceed, and no external connectivity delays, targeting commercial commissioning of the Bordersley site in late Q4 2019 / Q1 2020
Louis Coetzee, CEO of Kibo Energy, comments:
“This initial strategic acquisition made by Mast Energy Developments is a key milestone as they advance on their strategy to become a key player in the UK flexible power generation market.
"Preparations, including the appointment of an EPC contractor and owners engineer, as well as commercial discussions are well underway ahead of MED’s target of first operations in late Q4 2019 / Q1 2020.