Australian gas explorer Kinetiko Energy (ASX:KKO) reports it has received shareholder approval for the merger with Badimo Gas.
The company says on 24 December 2021, it executed binding legal agreements to acquire the remaining 51% of Afro Energy it did not already own from Badimo Gas, with consideration for the acquisition being over 567.704 million shares in Kinetiko.
Afro Energy is the incorporated joint venture (JV) 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 $6.5 million sell down of Badimo consideration shares at a price of no greater than $0.15 and no less than %0.075 per Kinetiko share.
This corresponds to a minimum of 43.333 million Kinetiko shares and a maximum of 86.666 million Kinetiko shares.
Kinetiko reports the Transaction Capital raising can occur within 4 months now all outstanding conditions are satisfied uner the Restructure Deed and Badimo’s shareholders will 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, and as a result the total consideration shares remains the same as 567.704 million.
Badimo’s largest shareholdfer and current Afro Energy Director Chairman Donald Ncube, and another Badimo shareholder Robert Bulder will be appointed to the board of Kinetiko 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 which restricts the disposal of their holdings in the compan .
A portion of the consideration shares will be escrowed for between 12 and 27 months from issue, and 2 of Kinetiko’s directors have also agreed to escrow a portion of their shares on the same terms pursuant to the proposed transaction.
Kinetiko Energy is an Australian gas explorer focused on advancing shallow conventional gas and coal bed methane (CBM) opportunities in rapidly developing markets in South Africa.