Local Consortium Acquire 51% Stake in Engen Zimbabwe

A consortium of local businessmen led by the founder of Croco Motors Mr Moses Chingwena has acquired a majority stake in Engen Zimbabwe, laying the ground for the takeover of Caltex/Chevron’s fuel supply and distribution operations in the country.

Engen Zimbabwe was engaged in negotiations with the local representatives of Chevron Zimbabwe on the disposal of their assets for some time now and were failing to breakthrough requirements of the Indigenisation and Economic Empowerment Regulations.

The regulations clearly spell out that locals should own 51% of foreign owned firms and most companies have submitted plans to Government on how they intended to comply.

After securing the Chevron Zimbabwe assets, Engen could not proceed without courting local partners and they accepted an offer from Mr Chingwena and his colleagues who snapped up the 51% shareholding. Besides Mr Chingwena, the other prominent member involved in the transaction is leading auditor Phibion Gwatidzo. Apart from Croco Motors, Mr Chingwena has diversified business interests in the automotive, banking and leisure industries.

Although the value of the deal could not be immediately ascertained, the consortium still has to seek the approval of the transaction from Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere. The consortium also appears to have put a tight lid on details about the transaction.

Earlier attempts by locals to buy the assets and business of Chevron Zimbabwe were unsuccessful as the tenants renting their service stations were allegedly misleading the holding company with threats that the Government was on the verge of nationalising the assets of foreign companies.

The tenants proposed to buy an ownership stake in Chevron Zimbabwe as a going concern as long as they were given security of their business under the Indigenisation Act. They also offered to purchase the retail sites they were operating from as sitting tenants. The same tenants also claimed that they had been invited by the Government to submit bids on the future of Chevron Zimbabwe in line with the Indigenisation Act, a position that was quickly rebuked by the Government.

It is understood that tenants have since been informed about the transaction and were invited to Caltex House in Harare recently where they were informed of the latest development and were addressed by Mr Chingwena. He is said to have assured the tenants that they would not disturb the downstream indigenisation process and would support qualifying existing tenants with finance to run their operations.

Those present were said to be very supportive of the new development and wanted to see quick implementation of the ownership and possible management change-over. Efforts to get a comment from Mr Chingwena and other members of his consortium were unsuccessful while calls to the Chevron Zimbabwe offices were unanswered.

Chevron Zimbabwe becomes the second foreign-owned oil company in recent months to have fallen into the hands of locals after Mr Shingi Mutasa through one of his subsidiaries FMI Zimbabwe, bought BP and Shell assets in the count.

Source: Zimbabwe Herald, Monday 18 October 2010