Vivo Energy announces agreement with Engen Holdings

Vivo Energy plc has announced that it has reached an agreement with Engen Holdings (Pty) Limited (EHL) to restructure the acquisition of Engen International Holdings Limited (EIHL) by Vivo Energy’s subsidiary, Vivo Energy Investments B.V.

According to a press release copied to the B&FT, the restructured transaction is now unconditional, 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. 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 statement said.

The transaction is expected to 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) is the ninth country included in the 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[1] 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.”

Meanwhile, 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, and Vivo Energy continues to evaluate the potential acquisition and negotiations with Engen.

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 welcoming around 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 said: “Engen is pleased with 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.”