Kibo says joint venture partner missed payment deadline

Kibo Energy announced on Friday that its subsidiary Mast Energy Developments (MED) has issued a formal notice of enforcement to Proventure Holdings UK for failing to meet the binding joint venture agreement (JVA) conditions.

The AIM-traded firm said the JVA required Proventure to make an initial interim payment of £2m and a balance payment of £3.9m to the joint venture’s special purpose vehicle (SPV).

However, Proventure missed the contractually agreed completion long-stop date of 30 November, as specified in previous announcements.

As per the terms of the JVA, Proventure remained contractually bound and in breach of its obligations until the agreement was completed.

MED had given Proventure a seven-day window to rectify the situation.

It said that if Proventure did not meet the conditions within the timeframe, MED would explore all available options, including terminating the JVA while retaining the right to claim damages and costs.

MED also decided not to grant further extensions to complete the joint venture.

In addition to the penalties imposed due to the delay in the interim payment, MED said Proventure faced a late payment penalty of £60,000 and liquidated damages of 0.25% of the total investment balance, along with any additional costs and expenses incurred by MED related to the joint venture projects.

Should the JVA be terminated, Proventure would be liable for further liquidated damages amounting to 5% of the total investment value and any reasonable costs and expenses incurred by MED in connection with the agreement.

“In consideration of the delays, MED has proceeded with advanced discussions with an alternative institutional investor to secure the necessary funding required to advance MED’s development plans,” Kibo Energy said in its statement.

At 1111 GMT, shares in Kibo Energy were down 11.11% at 0.04p.

Reporting by Josh White for Sharecast.com.