Owing to the adverse impact of the Covid-19 pandemic on international business and the uncertainty surrounding the global economic outlook, Africa-focused energy company Kibo Energy is re-evaluating its business plans, partly involving the potential reorganisation of its share capital.
The share capital reorganisation forms part of Kibo’s consideration of how the company can be best positioned to move forward when the current restrictions on business activities are relaxed or removed.
The purpose is to exploit the restrictive global lockdown period to reset and reposition the company to be able to take full advantage of the new normal post-Covid-19, especially within its area of strategic interest.
To address the share reorganisation, Kibo plans to hold an extraordinary general meeting (EGM) at 11:00 on June 8 at the company’s registered office in Dublin, Ireland.
Kibo says the EGM will be a closed meeting in compliance with the Irish government’s current advice and rules on non-essential travel and limitations on public gatherings as a result of the current Covid-19 pandemic.
Kibo has issued a shareholder circular on its website where shareholders can find information to register their votes by appointing the chairperson of the meeting (appointment of no other proxy is permissible) on the proxy form accompanying the notice of EGM.
Kibo is seeking approval from shareholders at the EGM to subdivide and consolidate its share capital, buy back and cancel deferred shares created in previous share capital reorganisations, and increase its authorised share capital.
Following, and contingent on passing of the resolutions, Kibo’s board proposes to settle outstanding salaries and fees to directors and senior management in the amount of €624 370 through the issue of new ordinary shares at an issue price equal to the adjusted ten-day volume-weighted average price for the period following the date of the EGM.
Kibo’s board believes the share capital reorganisation will best position the company to continue to fund its activities, encourage increased share trading on the Aim and the JSE, manage its existing debt liabilities and enhance short-term working capital.
The effect of the share capital reorganisation would be to initially subdivide the nominal value per existing ordinary share by a factor of ten, creating pre-consolidation shares and 2020 deferred shares, and then to decrease the number of existing ordinary shares in issue at the date of this document pro rata to about 127-million by way of the consolidation into one new ordinary share of every ten pre-consolidation shares.
There are currently 1.2-billion existing ordinary shares in issue, all of which are listed for trading on Aim and JSE.
The nominal value of the existing ordinary shares is €0.001, and this will remain the nominal value for the new ordinary shares following the share capital reorganisation.
As a group operating across the UK, Mozambique, Botswana, Tanzania and South Africa, Kibo is well placed to avail of the many business opportunities this geographic spread can create but it is also exposed to many risks, not least, the disruption to its on-going international operational and financing activities that the current crises is causing.
This disruption and current temporary reduction in field operational activity presents an opportunity for Kibo to implement a share capital reorganisation that its board believes will ultimately benefit the company, make it more attractive for further investment and crystalise the inherent value of its energy projects.
Kibo directors believe now is the appropriate time to implement the proposals contained herein to best prepare the company for the challenging economic environment expected in the aftermath of the pandemic.
The directors believe the universal need for reliable, sustainable and affordable electricity will be more critical than ever when the pandemic is over.
In addition to the share capital reorganisation proposal, Kibo is also currently carrying out an in-depth internal review of all its projects to assess and determine how the timeline to bring each to fruition can be accelerated and shortened and in which way resources can and should be reallocated and redeployed to achieve this objective.
Projects in terms of which the review might find no clear and realistic opportunity exists for an accelerated development path, might be considered for disposal in an appropriate manner.
The scope of the review also includes an assessment to determine how Kibo can accelerate the implementation of its renewable energy strategy as announced to the market in earlier announcements and also how it can take advantage of new opportunities that have come about as a result of the adverse impact of Covid-19.