Vivo Energy plc has reached an agreement with Engen Holdings (Pty) Limited to restructure the acquisition of Engen International Holdings (Mauritius) Limited by Vivo Energy’s subsidiary, Vivo Energy Investments B.V.
The restructured transaction is now unconditional according to Vivo Energy, aside from customary closing conditions including material adverse change clauses. All required regulatory and competition authorities’ approvals have been received for the transfer of Engen’s international operations in nine Sub Saharan countries, a statement by Vivo Energy has indicated.
The restructure allows for completion of the transaction, first announced on 4 December 2017, to proceed in respect of all countries other than the Democratic Republic of Congo. Completion has been scheduled for 1 March 2019.
The restructured transaction will add operations in eight new countries and over225 Engen-branded service stations to Vivo Energy’s network, taking its total presence to over 2,000 service stations, across 23 African markets.The new markets for Vivo Energyare Gabon, Malawi, Mozambique, Reunion, Rwanda, Tanzania, Zambia and Zimbabwe.Engen’s Kenyaoperations (where Vivo Energy already operates) is the ninth country included inthe transaction.
As per the agreement on 4 December 2017 and as a result of the restructure of the transaction, consideration in respect of the transfer of EIHL is US$203.9 million,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 EHL holding a circa 5.0% 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.
At this stage Engen continues its discussions with the Government of the Democratic Republic of Congo regarding the transfer of the subsidiary holding Engen’s DRC-related interests.Vivo Energy continues to evaluate the potential acquisition and negotiations with Engen are ongoing.
For the year ended 31 December 2017, unaudited management adjusted EBITDA for the nine entities that will transfer on 1 March 2019 was approximately US$33 million, of which US$26 million is attributable , with attributable net cash on hand of approximately US$48 million.
Vivo Energy’s belief in the potential of the businesses being transferred on 1March 2019, and the objective to achieve double digit volume and EBITDA growth rates over the medium term, set out as part of the IPO prospectus, remains unchanged. Vivo Energy will provide updated guidance for the nine Engen countries to the market, reflecting the changes to the transaction, with the 2018 full year results announcement in March 2019, following completion of the transaction.
Engen Holdings (Pty) Limited retains its interest in Engen Petroleum Limited (its South Africa business and refinery) and Engen’s businesses in Mauritius, Botswana, Ghana, Namibia, Swaziland and Lesotho, which are not part of the transaction.
Commenting on the transaction, Christian Chammas, CEO, Vivo Energy said: “Today’s announcement opens an important new chapter for Vivo Energy and we look forward to welcomingaround 350 new employees, adding eight new countries to our network, and increasing our target market by nearly 150 million people to around 35% of the African population. Importantly, our existing business remains on track to achieve our full year guidance and we continue to invest in and grow our existing operations.”
Yusa Hassan, Managing Director and CEO of Engen commented: “Engen is pleasedwith this transaction, which will enable the parties to proceed to completion on 1 March 2019. It aligns with our growth aspirations in Africa. We look forward to becoming a Vivo Energy shareholder, and adding another strong and well respected brand to the Vivo Energy group.”
Chammas concluded: “In Vivo Energy’s first seven years we invested to grow our business, increasing our network and adding new and refurbished shops and quick service restaurant offers. We have an opportunity to replicate this successful business model to drive growth and profitability in our new markets and look forward to updating the market in the new year on the scale of the opportunity ahead of us. We must seize this in order to deliver value for our shareholders, and move closer to achieving our goal of becoming Africa’s most respected energy business.”
Latest Stories
-
Bright Simons: DBG, Ghana’s top development bank, goes for the jugular
5 mins -
Governance and Entrepreneurship consultant demands global support for Africa’s young farmers
5 mins -
Ghanaians reminded to prioritise regular health check-ups
7 mins -
Salah brace sends Liverpool 8 points clear
17 mins -
Leicester City sack manager Steve Cooper
19 mins -
Akwasi Sarpong wins AIBs 2024 Award for BBC OS coverage of Israeli hostage release
30 mins -
Gospel musician Adeline Baidoo shares inspiring story of triumph over adversity
31 mins -
Kwesi Yankah: Escape from Ghana
1 hour -
Musician DeThompson DDT drops new single Happiness
1 hour -
Ukraine’s Grain Initiative raises over $200m, provides lifeline amid global food crisis
2 hours -
Dancehall queen Spice donates to students of 3 basic schools in Accra through MYO Global Foundation
2 hours -
Kamal-Deen Abdulai urges Nanton to help NPP break the 8
3 hours -
TVET is not a dumping ground for underperforming students – C/R Minister
3 hours -
BoG Governor calls for increased preparedness to respond to emerging financial sector challenges
3 hours -
IGP calls on public to aid Police in ensuring peace during 2024 election
3 hours