Vivo Energy enters eight new markets as Engen purchase completes

Vivo Energy announced the completion of its transaction with Engen Holdings on Friday, which added operations in eight new countries, and 230 Engen-branded service stations to Vivo Energy's network.

The FTSE 250 company said that took its total presence to more than 2,000 service stations across 23 African markets, with the new markets being 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 Vivo’s previous announcements, consideration for the transaction comprised an issue by Vivo Energy of 63.2 million new shares and $62.1m in cash.

The cash element of the consideration was funded by a drawdown on Vivo Energy's multi-currency facility.

“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,” the Vivo Energy board said in its statement.

“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.”