Mast Energy shares fall after cash crunch warning, dragging down Kibo

(Alliance News) - Mast Energy Developments PLC said on Friday its annual loss widened and warned that it might not be able to meet its debt obligations due to a cash crunch.

The London-based company operates reserve power generation plants in the UK. It is 58% held by Kibo Energy PLC, a Galway, Ireland-based company with energy projects in Africa and the UK.

For 2022, Mast Energy, which listed in November 2020, reported a loss of GBP2.7 million, widened from GBP1.4 million for the 15-months that ended December 31, 2021.

The group said the increase in the loss was mainly due to rising cost of sales following electricity generation at the Pyebridge site, elevated administrative expenses, and high impairment of the property, plant and equipment of Bordersley Power as a result of lower value in use.

Revenue totalled to GBP1.0 million in 2022, having been insignificant previously.

Mast Energy is technically insolvent as its current liabilities are at GBP1.9 million, far exceeding current assets of GBP268,985.

As at December 31, cash and cash equivalents stood at GBP132,184.

The company said its cashflow forecast was reliant on a successful drawdown on a current lending facility, as well as successful electricity generation by Pyebridge.

It warned that "unforeseen challenges" posed a risk that the company may not be able to meet its current liabilities without another cash injection.

"In the event that further funding cannot be secured, the group may experience continuous cash shortfalls over the next 18 months," it said.

Shares in Mast Energy shed 12% to 1.08 pence in London on Friday. Kibo Energy stock plunged 33% to ZAR0.02, while it lost 9.5% to 0.063 in London.

By Artwell Dlamini, Alliance News reporter

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