Accordingly, Sanderson will be issued 21,239,375 new ordinary Kibo shares at a price of 5.25p each, a 13% premium to the closing price of 4.65p on Friday 6 July 2018.
The company believes that the conversion at a premium is a strong endorsement of the current strategy.
Furthermore, with the termination of any claims by Sanderson, Kibo now can receive the full payment of US$3.7 million in cash due to it from its engineering, procurement and construction contractor SEPCO III.
"This is a strong endorsement of our strategy focused on building an African energy company to help alleviate the continent's growing energy deficit,” said Kibo’s chief executive Louis Coetzee.
“We have projects in Tanzania, Mozambique and Botswana and now a much stronger balance sheet with which to develop them. With the settlement of the Sanderson facility, the US$3.7 million due to us from SEPCO III and two possible further investments by it, which we announced last week, we now have the realistic expectation of a strong short-to-medium term cash position. Additionally, we now have no outstanding liabilities, which puts us in a much stronger position in terms of negotiations related to debt and equity funding for the three projects we are currently advancing.”
Following the settlement, Sanderson's shareholding in Kibo will increase to 8.45%.