Kinetiko Energy Ltd (ASX:KKO) is now free to complete the acquisition of the remaining 51% of Afro Energy (Pty) Ltd from Badimo Gas (Pty) Ltd after securing shareholders’ approval to merge with its joint venture partner in the Mpumalanga Gas Project in South Africa.
The company announced last year that it would issue 567,704,812 shares to Badimo as consideration for the stake in Afro Energy, which holds a 100% interest in the Mpumalanga Project, to streamline the exploration and development of nearly 7,000 square kilometres of land with a certified gas resource (2C) of 4.9Tcf.
As part of the merger, Kinetiko will conduct a ‘transaction capital raising’ by selling down $6,500,000 worth of the consideration shares at a price no more than $0.15 and no less than $0.075 per share.
No-sale pledge
Significantly, Badimo shareholders and two of the company’s directors have voluntarily agreed to place a portion of the shares they will receive in the Australian gas developer in escrow, restricting their sale, for between 12 and 27 months from issue.
To complete the merger, Badimo’s largest shareholder and current Afro Energy director and chairman Donald Ncube and another Badimo shareholder Robert Bulder will be appointed as non-executive directors of Kinetiko.
Kinetiko is focused on advancing shallow conventional gas and coal bed methane (CBM) opportunities in South Africa, a country with extensive gassy coal basins, widespread energy infrastructure and a growing gas demand.
The proposed indicative timetable for the completion of the transaction.
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