The restructured transaction will add operations in eight new countries and over 225 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 Energy are Gabon, Malawi, Mozambique, Reunion, Rwanda, Tanzania, Zambia and Zimbabwe. Engen’s Kenya operations, where Vivo Energy already operates, make up the ninth country included in the transaction.
Consideration for the
transaction comprises an issue by Vivo Energy of
63.2 million new shares and US$62.1 million in cash.
The cash element of the consideration has been funded by a draw down on Vivo Energy’s multi-currency facility.
“[This] announcement 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% of the African continent.
We have an opportunity to replicate this successful business model to drive growth and profitability in our new markets.
Following the transaction, Engen will retain 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,” the company said in a statement.