JSE-listed Kibo Energy yesterday announced the reduction of its debt by partially settling an existing loan in a critical move to streamline its financial standing.
This development comes after the firm transferred a 19.52% stake in its Mast Energy UK division to RiverFort Global Opportunities, a significant shareholder and financial partner.
Cobus van der Merwe, the interim CEO of Kibo Energy, said an agreement to transfer a 19.52% stake in its Mast Energy UK division to Riverfort in partial settlement of an outstanding balance on a £462 871 loan facility has helped reduce debt in the renewable energy firm.
Last month, Mast Energy, said it had raised revenue for the month of July from its first refurbished generating set at Pyebridge by 16% to £66 000. Now, Kibo Energy has agreed to transfer its remaining 19.52% stake in Mast Energy to Riverfort.
“The company is pleased that it has successfully negotiated this partial settlement of the RiverFort Loan as the Mast Energy share sale proceeds will also further help reduce the company’s debt in preparation for its upcoming reverse take-over. I would like to thank RiverFort for their co-operation in enabling this settlement,” said van der Merwe yesterday.
This strategic disposal is a continuation of Kibo’s efforts to clean up its balance sheet amidst broader corporate restructuring. Currently holding a 3.25% stake in Kibo Energy, RiverFort has been pivotal in aiding the company through challenging financial landscape.
Mast Energy, a key player within Kibo’s portfolio, has shown positive momentum, recently raising its revenue from a refurbished generating set at Pyebridge by 16% to £66 000 for the month of July.
However, as per financial records until the end of June 2023, the 19.52% stake that Kibo disposed of was linked to a loss of £96 049 against a net attributable revenue of £39 481.
Despite the current losses, the strategic importance of Mast Energy is underscored by its ongoing project at the Pyebridge site. Mast Energy is on the verge of completing an overhaul on its second genset, funded by a third advance from RiverFort amounting to £1.1 million.
This refurbishment is projected to maximise efficiency and reliability, significantly boosting Pyebridge's revenue generating capacity. Once the renovations are finished, Pyebridge will operate two fully refurbished 2.7MW gensets at optimal performance, enhancing Power Purchase Agreement (PPA) revenue.
Pyebridge will continue to benefit from its Capacity Market contract income from the UK government, ensuring a stable financial inflow during this transformative period.
Mast Energy’s aim is now fixed on enhancing the operational capacity of its third genset, aspiring for full site reliability and revenue optimisation.
“The net investment attributable to Mast Energy in Kibo’s most recently notified balance sheet was carried at £2 482 992,” said Kibo Energy.
“Therefore, the company expects to record a loss on disposal which will be determined and disclosed in the next published accounts.”
As Kibo Energy pushes forward with its ambitious reverse takeover plans, these steps towards financial prudence demonstrate a robust roadmap for sustainable growth and recovery.
“Once the work on the second genset has been completed, Pyebridge will have 2x 2.7MW completely refurbished gensets operating and generating at optimum capacity and performance, which should have a direct positive impact regarding the site’s PPA revenue generation,” it said earlier.
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