Vivo Energy to issue $400m notes

File photo: Hasan Jamali.

JOHANNESBURG – Vivo Energy, the Netherlands-based downstream petroleum company, wants to issue $400million (R5.03billion) senior unsecured notes in June, the company said yesterday.

Proceeds for the notes, whose maturity is five to seven years, would pay existing debt and pay fees and expenses related to its listing on the London Stock Exchange and the Johannesburg Stock Exchange earlier this month, Vivo Energy said in its financial results for the quarter ended March 31.

The company said it had sought credit rating from two rating agencies for the purpose of the notes issuance.

Vivo Energy, which is owned by oil trading giant Vitol and Africa-focused private investment firm Helios Investment Partners, distributes and markets Shell-branded fuels and lubricants to retail and commercial customers in Africa.

The company was established in 2011 through the carve-out of Shell’s African downstream business and been expanding and diversifying into new markets.

Engen Limited last year announced that, through subsidiary Engen Holdings, it would sell more than 300 Engen-branded service stations in 10 African countries to Vivo Energy Holding, Vivo said yesterday.

As a result of the deal, Vivo will get a footprint in nine new countries – the Democratic Republic of Congo, Zimbabwe, Réunion, Zambia, Gabon, Rwanda, Mozambique, Tanzania and Malawi.

The Engen transaction is subject to regulatory approval.

In the quarter ended March 31, Vivo Energy’s total volumes were up 5percent year-on-year, mainly because of an expansion of the retail network across the portfolio as well as strong volume performances in the commercial and lubricants segments.

Retail volumes increased 7percent, while commercial and lubricants volumes were up 2percent and 3percent, respectively.

Retail and commercial gross cash profit increased 10 percent and 7percent, respectively.

On the other hand, lubricants profit declined 10percent.

Adjusted earnings before interest, taxes, depreciation and amortisation increased 6percent year-on-year, primarily as a result of higher volumes and strong margins.

“We have made a good start to 2018, reflected in a strong set of results across our operations,” said Vivo Energy chief executive Christian Chammas.

Vivo shares on the JSE closed 5percent lower yesterday at R28.50.