Petrol station owner Viva Energy REIT has taken control of its own destiny by moving to cut management ties with energy company Viva Energy.

The $1.8bn real estate investment trust said it had internalised its management functions in the wake of Viva Energy in February selling its 35.5 per cent stake in the trust.

“The existing management arrangements do not provide Viva Energy REIT with a right to terminate, other than in limited circumstances. Accordingly, the internalisation provides a clear framework for management to be transitioned to Viva Energy REIT, whilst ensuring stability and certainty for Viva Energy REIT securityholders,” the company said.

The trust, the country’s largest listed REIT owning solely service station and convenience properties, has been relatively insulated from the coronavirus.

The REIT, which was advised by E&P Corporate Advisory, had been considered a potential target for the acquisitive Charter Hall before the crisis struck.

When the energy company sold down the group its long lease managed trust grabbed a 10 per cent stake in the REIT, but its ambitions appear less certain in the wake of the crisis.

Charter Hall and the Charter Hall Long WALE REIT each acquired a 5 per cent stake in the trust at $2.66 per share, totalling $103.5m, and the company last traded at $2.33.

The ties between Viva Energy and Viva Energy REIT remain close as the trust was granted rights to be offered properties tenanted by Viva, where an owner wishes to sell the property and Viva does not wish to exercise a pre-emptive right it might have to acquire the property, until 2030.

Viva Energy REIT will make an internalisation payment to the energy company of $2.5m and staff that had been running the trust will now shift to the new entity, and it will be renamed as Waypoint Trust.

This includes chief executive Hadyn Stephens, chief financial officer Kerri Leech, and general counsel, Tina Mitas. The trust hopes the new structure will help it access to debt and equity capital in future.

“The internalisation, together with the change of name, reflects a desire to establish the REIT as an independent, standalone business following VEA’s divestment of its 35.5 per cent securityholding,” the independent chairman of Viva Energy REIT, Laurie Brindle, said.

He added that the petrol station owner had a strong strategic relationship with Viva since it was listed in 2016 and had simplified its management and governance model, “in the current economic climate”.

Viva Energy separately said its objection to a disputed stamp duty assessment it made in 2018 with the Victorian State Revenue Office had been disallowed.

The company said it was reviewing the substance of the determination but did not consider that any new analysis has been raised that would alter its previous position and it expects to appeal the matter.

Extracted from The Australian