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(Alliance News) - Mast Energy Developments PLC said Tuesday it is considering various options after Proventure Holdings (UK) Ltd failed to "remedy" its "material breach" of the joint venture agreement.
Proventure failed to transfer GBP2 million payment and the balance of the investment of around GBP3.9 million.
Mast Energy said its board has decided to terminate the joint venture agreement with Proventure.
Under the provisions of this agreement and JVA deed of termination, Mast Energy is entitled to receive, and Proventure has an obligation to pay default penalties, amounting to GBP435,000.
The London-based subsidiary of Kibo Energy PLC, a Galway, Ireland-based company with energy projects in Africa and the UK said that Proventure has formally accepted default penalties, but "regrettably none of the required default penalties, nor any part thereof have been paid to date".
It said it is considering various options that will allow it to take "appropriate further action" against Proventure, its Chief Executive Officer Srinivas Kona and other directors aimed at, but not limited to, recovering the default penalties.
At the same time, Mast Energy is also considering pursuing its available options for "legal recourse" against the initial joint venture agreement lead-investor, Seira Capital and its CEO Srinivas Tangirala and other directors.
Basnk in February, Mast Energy signed a funding agreement, with an initial funding facility up to GBP4.0 million, with RiverFort Global Opportunities PCC Ltd. RiverFort owns around 12% stake in in Kibo and Mast.
Separately, Mast Energy Chief Executive Officer Pieter Krugel said the company is "pleased" that the overhaul of the first genset at Pyebridge is progressing well and on schedule.
"We are looking forward to completing the overhaul work within the expected timeline, and to move forward with the overhaul of the remaining two gensets. In the meantime, Pyebridge is operational and generating income," Krugel says.
Mast energy shares rose 11% to 0.25 pence each in London on Tuesday morning
Kibo stock remained unchanged both in London and in Johannesburg.
By Artwell Dlamini, Alliance News reporter
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