An objection has been filed to block a transaction where fuel giant Vivo Energy is selling 53 Engen service stations countrywide to the newly formed locally incorporated Nasan Energies.
Parties involved in the transaction have remained tight-lipped and have not responded to questions sent four weeks ago.
The Issue has learnt that an anonymous complaint and objection have been lodged with the Namibia Competition Commission (NaCC), in a bid to halt and scrap the deal.
Last month, an announcement was made that Vivo Energy, the local owners of the Shell service station franchise, has chosen to sell 53 Engen service stations around the country to Nasan Energies.
The relatively unknown player in the fuel retail sector is backed by second-generation Namibian businessmen.
The owners are listed in the media as Sean and Shiraz Tobias, as well as Miguel Hamutenya.
The transaction was significant because it represented the first time a Namibian privately-owned company has acquired a chain of fuel stations that can compete with bigger chains like Caltex, Puma and Shell. State-owned Namcor is the only other Namibian brand with a significant footprint.
However, the transaction itself came as a result of regulatory intervention from the NaCC, which found that Vivo Energy was entering monopoly territory and had to relinquish a part of its service stations.
The NaCC’s decisions came as a result of a major international transaction last year, in which Vivo Energy bought Engen Limited from Petronas. This transaction included Engen Namibia and its service stations in the country.
The NaCC intervention led to the decision by Vivo to sell 53 of the Engen service stations countrywide. It had advertised a call for expression of interest in the local media, and the new kid on the block, Nasan, was seemingly the successful bidder.
But there was a problem.
Questions sent over two weeks ago to Miguel Hamutenya, as a key figure at both Nasan Energies and Millennium Investment Holdings, have not been responded to.
THE COMPLAINT
The Issue has seen an objection memo to the NaCC, calling for the deal to be scrapped because the transaction, as it stands, will continue to further Vivo Energy’s dominance in the market. It further requested that Nasan be disqualified from the transaction because of a conflict of interest and that the Namibian entity is not truly independent from Vivo Energy. The request also calls for Vivo Energy to appoint a truly independent entity to sell the service stations to.
The conflict of interest allegations stem from what the memo states as indirect relationships between Vivo Energy and Nasan Energies. The Issue has learnt that Nasan Energies is closely linked to the Millennium Investment Holdings. One of the figures behind Nasan Energies is Miguel Hamutenya, who also doubles as group chief executive of Millennium, a company founded by his father, Mathew Hamutenya.
Based on media reports, Millennium has been in partnership with Vitol Group in a venture known as Validus Energy, which also has lucrative concessions to use the national oil storage facility managed by Namcor, at an alleged discount of over 90%. Millennium’s competitors complained that, apart from the alleged giveaway lease agreement, the company was using the facility as a base from where it supplies fuel to foreign countries, while the facility was supposed to serve as a national strategic reserve to prop up the country’s fuel supply security.
Vitol Group has shares in Vivo Energy.
Vivo Energy Namibia has not responded to questions about the transaction and complaints at the time of publishing.
The memo also claims that Nasan’s fuel distribution agreements are linked to Validus Energy and Vitol Group. This can be interpreted to mean there is a form of convergence, which can lead to the group’s dominance in the fuel retail industry in the country.
This is because this will mean Vitol Group and its partners in the country will be in control of significant portions of the fuel wholesale and retail sectors. A move with the potential to stifle competition.
The memo also took issue with the fact that the transaction was allegedly announced before approval from the NaCC was sought.
