Vivo Energy firms up deal to restructure Engen Holdings’ investments in 9 SSA countries

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Energy distribution and marketing firm Vivo Energy has reached an agreement with Engen Holdings Limited 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 besides the 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 African (SSA) countries, a statement jointly issued by the two companies said on Tuesday.

It said 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 1st March 2019.

The statement said 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.

It said 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.

The statement said 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 per cent shareholding in Vivo Energy.

It said the cash element of the consideration will be funded by a draw down on Vivo Energy’s multi-currency facility, established in May 2018.

The statement said 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.

It said Vivo Energy continues to evaluate the potential acquisition and negotiations with Engen are ongoing.

The statement said 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.

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