- March 4, 2019
- Posted in LOCAL
VIVO ENERGY Plc has completed a transaction with Engen Holdings (Pty) Limited, which involved an issue of 63,2 million new shares by the former, and US$62,1 million in cash.
The cash element of the consideration has been funded by a drawdown on Vivo Energy’s multi-currency facility.
Due to the share issuance, Engen, which is a key player in the country’s fuel sector, will hold about 5 percent shareholding in Vivo Energy.
Vivo Energy CEO Christian Chammas, on Friday said the deal “opens an important new chapter for Vivo Energy, welcoming around 300 new employees, adding eight new countries to our network, and increasing our target market by almost 160 million to around 36 percent of the African continent.”
The new markets for Vivo Energy are Gabon, Malawi, Mozambique, Reunion, Rwanda, Tanzania, Zambia and Zimbabwe.
Engen’s Kenya operations, where Vivo Energy already operates, is the ninth country included in the transaction.
On the basis of information provided by Engen, Vivo Energy believes that the 2018 financial performance of the target group will be similar to 2017.
Vivo Energy will provide full year guidance for 2019, incorporating the 10 months of contribution of the new Engen markets, with its full year results announcement on March 6.
Yusa’ Hassan, managing director and CEO of Engen, said: “Engen is excited to embark on this growth journey with Vivo Energy, and add another strong and well respected brand to the Vivo Energy Group.”
Following the transaction, Engen retains its interest in Engen Petroleum Limited – its South Africa business and refinery – and its businesses in Mauritius, Botswana, Ghana, Namibia, Swaziland and Lesotho, which are not part of the transaction.
Engen’s business in the Democratic Republic of Congo (DRC) remains under evaluation by Vivo Energy, pending any agreement between Engen and the DRC government regarding the transfer of the subsidiary holding, Engen’s DRC interests.
Mr Chammas said in Vivo Energy’s first seven years, they have “invested to grow our business, increasing our service station network and adding new and refurbished convenience retail and quick service restaurant offers”.
“We must seize this in order to benefit all our customers, deliver value for our shareholders, and move closer to achieving our goal of becoming Africa’s most respected energy business.”