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Engen agrees share swap with Shell's Africa operator

Dec 04 2017 19:31
Loni Prinsloo, Bloomberg

Johannesburg - Petroliam Nasional Bhd’s South African unit, Engen, and Vivo Energy Holding have agreed to a deal worth as much as R3.5bn ($256m) to combine some of their African fuel-retail assets, according to people familiar with the matter.

The deal represents about 20% of Engen’s equity value, said the sources, who asked not to be identified because negotiations are ongoing.

Vivo Energy, which operates more than 1 800 fuel stations across 15 African countries under the Royal Dutch Shell brand, will exchange some of its shares for stock in Engen Holdings, the companies said in an emailed statement on Monday.

The transaction may involve a “cash element”, they said, without disclosing the value or terms of the deal.

Combining their operations will give Vivo Energy access to 300 Engen-branded outlets in countries including the Democratic Republic of Congo, Zimbabwe, Zambia, Gabon, Rwanda, Mozambique, Tanzania and Malawi.

Engen will retain sole control of its operations in South Africa, Botswana, Lesotho, Swaziland, Namibia, Ghana, Mauritius as well as an oil refinery in South Africa that has the capacity to process 120 000 barrels of oil a day.

Vivo Energy is jointly owned by Vitol SA and Africa-focused private-equity firm Helios Investment Partners.

Petronas, Malaysia’s national oil company, bought Engen in 1998 in a deal that valued the company at about $700m before selling a stake to Phembani.

If the deal with Vivo goes ahead, Phembani would also take a stake in the Dutch company, said the sources  Vivo could then begin trading its shares on the London Stock Exchange in 2018.

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royal dutch shell  |  engen  |  oil industry  |  fuel

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