Helios Investment’s oil and gas portfolio company, Vivo Energy completes Energy Deal

18 Sep 2018

18th September 2018 - Vivo Energy plc (“Vivo Energy”) announces that it has reached an agreement with Engen Holdings (Pty) Limited (“Engen” or “EHL”) to restructure the acquisition of Engen International Holdings (Mauritius) Limited (“EIHL”) by Vivo Energy’s subsidiary, Vivo Energy Investments B.V.. 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 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) 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 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 1 March 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.

An presentation providing background on the transaction is available at https://investors.vivoenergy.com/results-reports-and-presentations/2018.

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 commented: “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.”

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.”

-END-

Media contacts:

Vivo Energy plc

Rob Foyle, Head of Communications
+44 7715 036 407
rob.foyle@vivoenergy.com

Engen Holdings (Pty) Limited
Gavin Smith, Group Communications Manager
+27 82 379 1700
gavin.smith@engenoil.com

Investor contact:

Vivo Energy plc

Giles Blackham, Head of Investor Relations
+44 1234 904 306 
giles.blackham@vivoenergy.com

Tulchan Communications 
Martin Robinson, Toby Bates
+44 20 7353 4200
vivoenergy@tulchangroup.com

About Vivo Energy:

Vivo Energy operates and markets its products in countries across North, West, East and Southern Africa. The Group has a network of over 1,800 service stations in 15 countries and exports lubricants to a number of other African countries. Its retail offering includes fuels, lubricants, card services, shops and other non-fuel services (e.g. oil change and car wash). It provides fuels, lubricants and liquefied petroleum gas (LPG) to business customers across a range of sectors including marine, mining, construction, power, transport and manufacturing. Jet fuel is sold to customers under the Vitol Aviation brand.

The Company employs around 2,360 people and has access to approximately 943,000 cubic metres of fuel storage capacity. The Group’s joint venture, Shell and Vivo Lubricants B.V., sources, blends, packages and supplies Shell-branded lubricants and has blending capacity per annum of around 158,000 metric tonnes at plants in six countries (Ghana, Guinea, Ivory Coast, Kenya, Morocco and Tunisia).

About Engen:

Engen is an oil company focusing on the downstream refined petroleum products market and related businesses, with a presence across Sub Saharan Africa and the Indian Ocean Islands. The company’s core functions are the refining of crude oil, the marketing of primary refined petroleum products and the provision of convenience services via an extensive retail network.

Engen is a member of the PETRONAS Group.

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