New Delhi: Reliance Industries has exited its African fuel retail business by selling its entire 76 percent stake to Total SA of France for an undisclosed sum.
Total, which is already a leading retailer of petroleum products in Africa, will acquire Gulf Africa Petroleum Corporation's (GAPCO) assets in Kenya, Uganda and Tanzania.
RIL's overseas arm Reliance Exploration & Production DMCC owned 76 percent stake in GAPCO while Fortune Oil Corp, Mauritius held the remaining.
Total is acquiring stake of both the firms.
"Reliance Exploration & Production DMCC, an indirect wholly owned subsidiary of RIL and Total, have executed agreements on May 30, 2016 for the sale of the entire 76 percent interest held by REPDMCC in the Mauritius-incorporated Gulf Africa Petroleum Corporation (GAPCO)," RIL said in a statement.
The proposed transaction is subject to regulatory approvals and other closing conditions that are customary for similar transactions.
It, however, did not disclose the deal size.
GAPCO is a holding company incorporated in Mauritius with affiliates in Kenya, Uganda and Tanzania which are primarily engaged in petroleum product import and trading, storage, distribution, marketing, supply and transportation of oil products in East Africa.
On conclusion, Total will get ownership of two logistical terminals in Mombasa in Kenya and Dar es Salaam in Tanzania, as well as a retail network of over 100 service stations.
The acquisition will be complementary to Total's existing operations in Kenya, Uganda and Tanzania and will strengthen its logistics in the region.
RIL had in September 2007 bought a clutch of fuel stations and storage facilities in one of the fastest growing regions in Africa.
"Since the acquisition of 76 percent equity interest in GAPCO by REPDMCC in 2007, GAPCO has significantly grown and is one of leading petroleum marketing companies in East Africa, which now operates 108 retail outlets and owns 2,60,000 kilolitre of storage capacity," the statement said.
The net proceeds for the sale will be finalised on completion of the transaction which is expected to be within the coming months, it added.
RIL said the agreement signed by Reliance Exploration and Production DMCC (REPDMCC) to sell its interest in GAPCO was part of a joint transaction, wherein both REPDMCC and the minority shareholder have agreed to sell their entire respective holdings in for cash.
"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.
The assets acquired, which complement Total's activities in East Africa, will help the firm fully "leverage synergies of size and build the most competitive integrated regional supply, logistics and marketing base," he added.
Total is the 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 percent in 2015 to more than 20 percent.