Vivo sets sights on Africa stations
Vivo Energy will probably run at least 2,400 petrol stations across Africa by the end of 2018, according to private-equity backer Helios Investment Partners, which says it is in no rush to sell its remaining 30% stake.
Vivo Energy will probably run at least 2,400 petrol stations across Africa by the end of 2018, according to private-equity backer Helios Investment Partners, which says it is in no rush to sell its remaining 30% stake.
Vivo, which listed on the JSE last week shortly after listing in London, runs nearly to 2,000 petrol stations under the Shell brand, while it will add another 300 Engen-branded service stations to its portfolio in 2018.
Helios, which manages assets worth $3.5bn, reduced its stake in Vivo from 45% to 30% by selling shares to institutional investors during Vivo’s listing. About 30% of Vivo’s shares are publicly listed, with a majority of those held through London.
Helios co-founder Tope Lawani told Business Day the Engen deal, to grow Vivo’s footprint to 24 African markets, would be funded from internal cash resources.
But Vivo may turn to the market to help fund any large acquisitions it finds in the future. Helios saw “no overwhelming pressure to divest” its remaining Vivo shares as it saw strong organic and acquisitive growth opportunities for Vivo.
While fuel consumption was low in Africa, consumption would be boosted by urbanisation and growing wealth.
Many African countries had GDP per capita of $1,000$10,000, a level of which “you really see an acceleration in terms of vehicle ownership and fuel consumption. So we see huge opportunities not just in the countries where we’re present but also in other countries.”
Lawani said Vivo would consider entering new markets such as SA, Nigeria and Egypt via acquisitions.
Meanwhile, he said, a number of retailers had approached Vivo about forecourt partnerships. Competition for these tieups was being driven by the lack of well-located real estate.
“[Vivo’s] Shell portfolio is probably the largest, or secondlargest, real estate footprint in Africa,” he said. “So if you’re a quick-service restaurant you can go to one firm and access a large number of sites.”