Puma Energy seals Redan deal

Published: 04 December 2013

Global fuel company Puma Energy has acquired a significant shareholding in Redan Petroleum for an undisclosed amount. Puma Energy head of media relations Ms Victoria Dix said in an e-mailed statement to the Herald Business that her company had completed a transaction with Redan after obtaining all local regulatory approvals.

"We can confirm Puma Energy has bought an equity stake in Redan Petroleum. The Redan management team will continue to run the business as usual," she said. "Puma Energy and Redan have obtained the necessary regulatory approvals."

She, however, refused to disclose the value of the deal and the size of the shareholding they have acquired although initial indication were that Puma Energy was eyeing a 60 percent stake in Redan Petroleum.

Initial indications were also that, if the transaction sails through, Puma Energy would pay between $20 and $24 million for the shareholding, according to an independent valuation done by a local advisory firm.

Mr Tafadzwa Chigumbu, who owned 100 percent equity in Redan, confirmed reducing his shareholding to attract capital.

"I can confirm that we closed the transaction early November after obtaining all regulatory approvals," he said. "We would like to thank the authorities for approving our transaction. We are now focused on growing Redan and participate in the growth of our country."

Puma Energy, which has operations in 33 countries, including neighbouring Zambia and Botswana, is a joint venture between Trafigura, one of the world's leading commodities traders, and Sanagol, an Angolan state-owned firm on a 55-45 percent shareholding basis.

The Puma Energy investment has come at a time when there is a scramble for investment in Zimbabwe's fuel industry. Bulk fuel operators are now dominated by foreigners, some who once had operations before.

Redan, suffering from fuel interruptions due to funding constraints, requires at least $20 million "but it is always a moving target", Mr Chigumbu told The Herald Business in a recent interview.

But Ms Dix said "we do not wish to disclose future plans" or how Puma Energy intends to recapitalise the business.

Redan Petroleum, then co-owned by Mr Chigumbu and Mr Nigel Earle, started fuel imports in 2004.

Mr Earle sold his 50 percent shareholding to Mr Chigumbu in 2010 for $8 million. Since then, Redan has been pursuing various recapitalisation avenues including listing 40 percent of its issued shares on the Zimbabwe Stock Exchange.

Investec of South Africa and Chinese oil company Sinopec also made offers for significant shareholding in the company. Redan sells an average 18 million litres of fuel per month and employs about 600 workers. It operates 67 service stations countrywide.
- herald