NAIROBI, Kenya, Sept 18 – Vivo Energy has reached an unconditional agreement to complete the transfer of Engen Holdings’ operations in 9 Sub Saharan countries by 1 March 2019.
Upon completion, Vivo Energy’s retail service station network will expand from 15 to 23 countries in Africa and will become the largest pan-African independent network.
The deal will give Vivo Energy access to new markets including Gabon, Malawi, Mozambique, Reunion Islands, Rwanda, Tanzania, Zambia and Zimbabwe.
Engen’s Kenya operations, where Vivo Energy already operates, is the ninth country included in the transaction.
Vivo Energy CEO Christian Chammas said the transaction will see the company increase its target market by nearly 150 million people to around 35 percent of the African population.
Engen will, however, retain its interest in its South Africa business and refinery and its businesses in Mauritius, Botswana, Ghana, Namibia, Swaziland and Lesotho, which are not part of the transaction.
“Completion will also not include Engen’s international operations in the Democratic Republic of Congo, but discussions are ongoing between Vivo Energy and Engen,” the company said in a statement.
As per the agreement on 4 December 2017 and because of the restructure of the transaction, consideration in respect of the transfer of the company is US$203.9 million (Sh20.2b), comprising an issue by Vivo Energy of 63.2 million new shares valued at Vivo Energy’s IPO Offer Price of 165 pence per share and US$62.1 million in cash, resulting in Engen’s holding a about 5.0 percent shareholding in Vivo Energy.
The cash element of the consideration will be funded by a draw down on Vivo Energy’s multi-currency facility, established in May 2018