Viva Energy and Coles have committed to expanding their petrol station alliance to add more than 100 sites over the next five years after resolving a dispute that could have derailed Viva’s plans for a $2 billion property spin-off.
Coles said on Friday that a decision from the court of appeal in Victoria’s Supreme Court had resolved aspects of the alliance and pledged to work with Viva on growth plans.
Coles, through its subsidiary Eureka Operations, had originally been seeking to block Viva’s ambitions for a restructuring that would create a new petrol station real estate investment trust that could be listed on the ASX. But the court dismissed the legal action in May, and Coles had a month to decided whether to launch another appeal in a higher court.
But its statement on Friday makes it clear it has accepted the decision.
“The alliance relationship is strong and we look forward to continuing to work with Viva Energy on implementing current and future growth plans,” the spokesman said.
“Eureka fully supports Viva Energy in establishing an A-REIT. If an A-REIT proceeds, it will provide a strong platform to support the further expansion of the retail network.”
Viva, whose origins lie in the $2.9 billion acquisition by its parent Vitol and Abu Dhabi Investment Council of Shell’s Geelong refinery and petrol station business, welcomed Coles’ announcement and said that if an A-REIT proceeds it will “provide a strong platform to support the further expansion of the retail network”.
A Viva spokeswoman said while no decisions had been made on the spin-off, the company “intends to progress plans to establish an A-REIT”.
Viva chief executive Scott Wyatt said in an August interview the restructuring would have the advantage of providing funds for growth.
Plans are understood to be well advanced, with the brokers for the float, Deutsche Bank and Bank of America Merrill Lynch, due to introduce the player to fund managers next week, as reported by Street Talk. The REIT would own an initial portfolio of 425 freehold service station sites, which are leased to Viva and is expected to be worth about $2 billion.
Viva has added more than 30 sites to the alliance’s network in the past 12 months, the largest increase in its network for several years, the spokeswoman said, confirming plans for further growth.
“Those investment plans contemplate ongoing network growth which will see our two organisations working together with a view to opening more than 100 alliance sites over the next five years,” she said.