Reliance Industries Ltd (RIL) today announced it has signed agreements with Total SA of France for sale of its entire 76 per cent stake in African fuel retailer Gulf Africa Petroleum Corporation (GAPCO) for an undisclosed sum.
RIL had in 2007 bought the majority 76 per cent stake and management control in GAPCO which has significant presence in the downstream petroleum sector in African countries including Tanzania, Uganda, Rwanda and Kenya in East Africa. RIL's overseas arm Reliance Exploration and Production DMCC (REPDMCC) holds 76 per cent while Fortune Oil Corporation, Mauritius holds the remaining stake.
"REPDMCC's agreement to sell its interest in GAPCO is part of a joint transaction wherein both REPDMCC and the minority shareholder have agreed to sell their entire respective holdings in GAPCO for cash. The net proceeds for the sale will be finalized on completion of the transaction which is expected to be within the coming months," RIL said in a statement.
The company said Mauritius-incorporated GAPCO is a holding company with subsidiaries in Tanzania, Kenya and Uganda which are primarily engaged in petroleum product import apart from trading, storage, distribution, marketing, supply and transportation of oil products. GAPCO owns 260 thousand kilo liter (TKL) of storage capacity and operates 108 retail outlets. RIL said the proposed transaction is subject to regulatory approvals and other closing conditions.
Total said the acquisition of GAPCO assets will help it expand in the continent. "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, 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.
The main assets acquired by Total include terminals in Mombasa and Dar-es-Salaam and a network of 100 gas stations. The company said the acquisition of the assets is complementary to Total's existing operations in Kenya, Uganda and Tanzania and will strengthen its logistics in the region and accelerate the growth of service station network, particularly in Tanzania. Total claims it is a leading petroleum product retailer in Africa with a network of more than 4,000 service stations. The company aims to grow its market share from 17 per cent in 2015 to more than 20 per cent.
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