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VIVO ENERGY PLC - Update on the Transaction between Vivo Energy and Engen Holdings

Release Date: 18/09/2018 08:00
Code(s): VVO     PDF:  
Wrap Text
Update on the Transaction between Vivo Energy and Engen Holdings

 Vivo Energy plc
(Incorporated in England and Wales)
(Registration number: 11250655)
(Share code: VVO)
LEI: 213800TR7V9QN896AU56
ISIN: GB00BDGT2M75




18 September 2018
Vivo Energy plc
LSE:VVO / JSE:VVO


Update on the Transaction between Vivo Energy and Engen Holdings

    -   Unconditional agreement to complete the transfer of Engen’s international operations in
        nine Sub Saharan countries to Vivo Energy on 1 March 2019
    -   On completion, Vivo Energy’s retail service station network will expand from 15 to 23
        countries in Africa, and will become the largest pan-African independent network by a
        wide margin
    -   Completion will not include Engen’s international operations in the Democratic Republic
        of Congo, but discussions are ongoing between Vivo Energy and Engen


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 (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.

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
(2), 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.

Vivo Energy will host a conference call for investors and analysts this morning at 08:30 BST. Access details
for the call are below and an accompanying presentation providing background on the transaction is
available at https://investors.vivoenergy.com/results-reports-and-presentations/2018:

             Number:         +44 20 3936 2999
             Passcode:       488697

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.”


                                                   Ends


    (1) Exchange rate fixed on 4 May 2018 at 1.36 US$ to GBP

    (2) Minority interests in Gabon and Zimbabwe

Notes to editors:

      Media contacts:                                                    Investor contact:
      Vivo Energy plc                                                    Vivo Energy plc
      Rob Foyle, Head of Communications                                  Giles Blackham, Head of Investor Relations
      +44 7715 036 407                                                   +44 1234 904 306
      rob.foyle@vivoenergy.com                                           giles.blackham@vivoenergy.com

      Engen Holdings (Pty) Limited                                      Tulchan Communications
      Gavin Smith, Group Communications Manager                         Martin Robinson, Toby Bates
      +27 82 379 1700                                                   +44 20 7353 4200
      gavin.smith@engenoil.com                                          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).

For more information about Vivo Energy please visit www.vivoenergy.com.


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.

Forward-looking statements
This announcement includes forward-looking statements. These forward-looking statements involve known and unknown risks and
uncertainties, many of which are beyond the Company’s control and all of which are based on the Directors’ current beliefs and
expectations about future events. Forward-looking statements are sometimes identified by the use of forward-looking terminology
such as: “believe”, “expects”, “may”, “will”, “could”, “should”, “shall”, “risk”, “intends”, “estimates”, “aims”, “plans”, “predicts”,
“continues”, “assumes”, “positioned”, “anticipates” or “targets” or the negative thereof, other variations thereon or comparable
terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places
throughout this report and include statements regarding the intentions, beliefs or current expectations of the Directors or the Group
concerning, among other things, the future results of operations, financial condition, prospects, growth, strategies of the Group and
the industry in which it operates.

No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks
and uncertainties facing the Group. Such risks and uncertainties could cause actual results to vary materially from the future results
indicated, expressed, or implied in such forward-looking statements.

Such forward-looking statements contained in this report speak only as of the date of this report. The Company and the Directors
expressly disclaim any obligation or undertaking to update these forward-looking statements contained in the document to reflect
any change in their expectations or any change in events, conditions, or circumstances on which such statements are based, unless
required to do so by applicable law.

JSE Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd

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