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(Sharecast News) - Kibo Energy made a significant step in divesting its coal assets on Wednesday, striking a definitive share sale agreement for its coal interest in the Botswana power project with Shumba Energy.
The AIM-traded firm said it would sell its remaining 35% equity holding in Kibo Energy Botswana - the entity which held its interests in the coal resources affiliated with the Mabasekwa Coal to Power Project.
Despite the project holding nil carrying value and an associated pre-tax loss of £3.56m as of 31 December last year, mainly attributed to a full impairment of the carrying value, Shumba agreed to a purchase consideration of $0.38m.
That would be compensated in both cash and the issue of shares in Shumba's authorised-yet-unissued share capital, listed on the Botswana Stock Exchange (BSE).
Kibo said the precise number of shares would be determined based on the volume-weighted average price of shares in Shumba, calculated over 30 trading days before the issue date and then rounded to the nearest whole share.
Through the disposal, Kibo Energy said it was adhering to its strategy of divestiture from fossil fuel-based assets and bolstering its financial resources.
The sale would assist in fortifying the company's financial base, ensuring continued access to resources when needed.
Moreover, Kibo said it remained engaged in discussions with various potential funding sources to sustain its working capital needs and preserve its financial health and stability.
"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 an appropriate disposal and disinvestment or repositioning of all hydrocarbon and coal-based assets," said chief executive officer Louis Coetzee.
"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."
Reporting by Josh White for Sharecast.com.
