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(Alliance News) - Mast Energy Developments PLC on Monday said its partner Proventure Holdings (UK) Ltd still has not made a partial initial interim payment required under their joint venture agreement.
The London-based subsidiary of Kibo Energy PLC also said it is in "advanced" discussions over an alternative source of short-term funding to ensure that any further delays regarding the joint venture agreement "will not unduly" hurt Mast's ability to meet its working capital needs.
Proventure failed to transfer of a first GBP1 million payment by no later than December 29. A second payment of GBP1 million is scheduled be transferred by no later than this coming Thursday.
The original deadline the interim payment of GBP2.0 million was November 10. Proventure also must pay the balance of the investment of around GBP3.9 million.
Back in October, Mast signed a binding JV agreement with Proventure. It had previously finalised a JV deal with a consortium led by Seira Capital Ltd, but the long-stop date was revised after Seira's principal was involved in a serious road accident.
On Monday, Mast said it understood the payment was delayed by a lack of coordination and by administrative difficulties on the side of Proventure over the holiday period.
Proventure Chief Executive Officer Srinivas Kona will be travelling to London soon to work with Mast Chief Executive Officer Pieter Krugel to address the overdue payments, as well as to finalise the outstanding administration to complete the JV transaction, Mast said.
"The past year has proven exceptionally challenging for MED, not only from a macro-economic perspective affecting most businesses globally, but also from a transactional perspective," Krugel said.
Kibo is a Galway, Ireland-based company with energy projects in Africa and UK. It owns 48% of Mast Energy.
In Johannesburg, Kibo shares were unchanged at 1 rand cent on Monday morning. Over 12 months, the stock is down 75%.
By Artwell Dlamini, Alliance News reporter
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