Vivo Energy plc (LON:VVO) today announced the completion of the transaction with Engen Holdings (Pty) Limited previously announced on 18 September 2018. The transaction adds operations in eight new countries and 230 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 previous announcements, 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.
The newly allotted and issued shares are expected to be admitted to the Official List and to trading on the main market of the London Stock Exchange on 4 March 2019 and to the Johannesburg Stock Exchange on or about the 4 March 2019. Following the share issuance Engen will hold a circa 5.0% shareholding in Vivo Energy.
On the basis of information provided by Engen, Vivo Energy believes that the 2018 financial performance of the target group will be similar to 2017. Increased fuel volumes, driven by the commercial segment, are expected to have been offset by lower margins, primarily due to mix effects. Vivo Energy will provide full year guidance for 2019, incorporating the 10 months of contribution of the new Engen markets, with its full year results announcement on 6 March 2019.
Following the transaction, EHL retains 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.
Vivo Energy’s total issued share capital will increase to 1,265,002,519 ordinary shares following the transaction, with no shares being held in treasury. This number may be used by Vivo Energy shareholders as the denominator for calculations by which they will determine if they are required to notify of their interest in, or a change in their interest in, the share capital of the Company under the FCA’s Disclosure and Transparency Rules.
