RIL to sell entire majority stake in East African fuel retailer to Total S.A.
31 May 2016
Mukesh Ambani-led Reliance Industries (RIL) today struck a deal to sell its 76-per cent stake in East African fuel retailer Gulf Africa Petroleum Corporation (GAPCO) to French energy giant Total S. A. for an undisclosed sum.
RIL's overseas arm Reliance Exploration & Production DMCC is selling the stake in GAPCO's assets in Kenya, Uganda and Tanzania to Total Marketing & Services.
The assets being acquired are two logistical terminals in Mombasa, Kenya and Dar es Salaam, Tanzania, as well as a retail network of 108 service stations.
Reliance Exploration & Production holds 76 per cent stake in GAPCO while Fortune Oil Corporation, Mauritius holds the remaining 24 per cent.
Under the terms of the agreement, Fortune Oil has also agreed to sell its entire stake to Total in cash. The net proceeds for the sale will be finalised on closing of the transaction.
Since acquiring its stake in 2007, GAPCO has significantly grown and is one of the leading petroleum marketing company in East Africa, operating 108 retail outlets and owns 260 TKL of storage capacity.
GAPCO is engaged in importing petroleum products, trading, storage, distribution, marketing, supply and transportation of oil products in East Africa.
The acquisition of these assets are complementary to Total's existing operations in Kenya, Uganda and Tanzania, which will strengthen the French company's logistics in the region and significantly accelerate the growth of its service station network, particularly in Tanzania.
Total is the leading petroleum product retailer in Africa, with a network of more than 4,000 service stations, of which it has 67 in Tanzania, 9 in Kenya and 32 in Uganda. The company aims to grow its market share from 17 per cent in 2015 to more than 20 per cent.
''This acquisition is in line with Total's growth strategy for the distribution of petroleum products and services in Africa, which aims at expanding in fast-growing regions while maintaining high profitability,'' said Momar Nguer, president of Total Marketing & Services.
''These assets, which complement our activities in East Africa, will help us fully leverage synergies of size and build the most competitive integrated regional supply, logistics and marketing base,'' he added.