By Loni Prinsloo
(Bloomberg) – Petroliam Nasional BHd and its South African partners plan to conduct an initial public offering in their fuel retailer Engen to fund the upgrade of a refinery in the coastal city of Durban and to expand its network of gas stations.
A yet to be decided amount of shares in the company, which is South Africaâs biggest fuel retailer, will likely be sold on the Johannesburg Stock Exchange in the first half of next year, according to people familiar with the matter. Engenâs 135,000-barrel-per-day refinery needs to be upgraded to meet more stringent laws aimed at curbing pollution.
Engen is 74% owned by Malaysiaâs Petroliam Nasional, known as Petronas, and 26% held by a group led by Phembani, a South African company founded by Phuthuma Nhleko, one of the countryâs most successful black businessmen. JPMorgan Chase & Co. has been mandated to assist Petronas with the listing, the people said, asking not to be identified as the plan hasnât been announced.
Engen, which was founded in 1881 and now operates in seven African countries, has an asset value of more than R40bn ($2.6bn), according to the people. In its 2018 financial year it posted revenue of R82.5bn and net income of R1.8bn.
In addition to its own operations, Engen earlier this year swapped gas stations in eight African countries for a stake in Vivo Energy Plc. While Petronas gained control of Engen in 1998 it has since tried to sell the company, holding talks with South Africaâs state oil company, PetroSA, in 2013.
âShould there be an IPO exercise the market will be informed,â Petronas said in a response to queries.
Engen didnât immediately comment when called by Bloomberg. JPMorgan didnât immediately respond to an emailed query.
