Vivo Energy concludes transaction with Engen, expands Africa network from 15-23 countries
07-03-2019 09:29:00 | by: Pie Kamau | hits: 1827 | Tags:

Vivo Energy has announced its conclusion with Engen Holdings transaction, leading to expansion of its service station network to 8 new countries in Africa and 230 Engen service stations, bringing the total number of service stations in the network to more than 2,000 in 23 African markets.

For Vivo Energy, the new markets are: Gabon, Malawi, Mozambique, Reunion, Rwanda, Tanzania, Zambia and Zimbabwe. Engen's operations in Kenya (where Vivo Energy already operates) are also part of the transaction, representing the ninth country.

The consideration for the transaction includes Vivo Energy's issuance of 63.2 million new shares and $ 62.1 million in cash. The cash element of the counterparty was financed by drawing on Vivo Energy's multicurrency credit facilities. Once the shares are issued, Engen will hold approximately 5% of Vivo Energy's shares.

Christian Chammas, Chief Executive Officer of Vivo Energy, commented:

‘’This announcement opens a new and important chapter for Vivo Energy, with the welcome of 300 new employees, the addition of eight new countries to our network and increase our target market by about 160 million, or about 36% of the African continent.’’

According to information provided by Engen, Vivo Energy estimates that the 2018 financial results of the targeted Group will be similar to those of 2017. It is expected that the increase in fuel volumes, to which the commercial segment contributed significantly, is offset by the lower margins.

Vivo Energy will provide guidance for the full year 2019, including the 10-month forecast contribution from the new Engen markets, with the announcement of its results for the full year on March 6, 2019.

Yusa 'Hassan, Chief Executive Officer and Chairman Managing Director of Engen said: ‘’Engen is looking forward to a growth path with Vivo Energy and adding another strong and well-respected brand to Vivo Energy Group.’’

EHL retains its interests in Engen Petroleum Limited (its business and refinery in South Africa) and its operations in Mauritius, Botswana, Ghana, Namibia, Swaziland and Lesotho, which are not part of the transaction.

Vivo Energy continues to evaluate Engen's activities in the Democratic Republic of Congo (DRC), pending an agreement between Engen and the DRC government to transfer the interests of Engen's subsidiary in the DRC.

Mr. Chammas concluded:

‘’In the first seven years of Vivo Energy, we have invested to grow our business. We have expanded our network of gas stations and added shops and fast food establishments that we have created or modernized. We have the opportunity to replicate this proven business model to drive growth and profitability in our new markets. We must seize it to benefit all our customers, add value to our shareholders and move closer to our goal of becoming Africa's most respected energy company.’’

www.vivoenergy.com