Kinetiko Energy Mergers With Badimo Gas
Kinetiko Energy Mergers With Badimo Gas. Kinetiko Energy Ltd, an Australian gas explorer and developer focused on advanced shallow conventional gas and coal bed methane in South Africa, is pleased to provide the following update post the completion of the recent Annual General Meeting.
On 24 December 2021, Kinetiko announced it had executed binding legal agreements to acquire the remaining 51% of Afro Energy (Pty) Ltd it did not already own from Badimo Gas (Pty) Ltd, with consideration for the acquisition being 567,704,812 shares in Kinetiko (the Proposed Transaction). Afro Energy is the incorporated joint venture (JV) company between Kinetiko and Badimo which holds a 100% interest in the Mpumalanga Gas Project in South Africa.
In order to complete the merger Kinetiko will facilitate a $6,500,000 sell down of Badimo consideration shares at a price of no greater than $0.15 and no less than $0.075 per Kinetiko share (Transaction Capital Raising). This corresponds to a minimum of 43,333,334 Kinetiko shares (at a $0.15 issue price) and a maximum of 86,666,667 Kinetiko shares (at a $0.075 issue price). The Transaction Capital Raising can occur within four months now all outstanding conditions are satisfied under the Restructure Deed and Badimo’s shareholders will not be allowed to participate in the Transaction Capital Raising.
The number of new shares issued by Kinetiko as part of the Transaction Capital Raising will ultimately be deducted from the number of Consideration Shares that will be issued to the Badimo Shareholders so the total consideration shares issued remains the same as 567,704,812. Badimo’s largest shareholder and current Afro Energy Director Chairman, Mr Donald Ncube, and another Badimo shareholder, Mr Robert Bulder, will be appointed to the board of the Company as Non- Executive Directors.
A further component of the Proposed Transaction is that the Badimo Shareholders have voluntarily agreed to place the Consideration Shares they receive in escrow (Voluntary Escrow), which restricts the disposal of their holdings in the Company. A portion of the Consideration Shares will be escrowed for between 12 and 27 months from issue. Two of the Company’s directors have also agreed to escrow a portion of their shares on the same terms pursuant to the Proposed Transaction.
