Viva set for float
Readying for July launch
THE company that owns the Geelong oil refinery and supplies Shell-branded fuel across the nation has been valued up to $6.2 billion ahead of its likely float in July.
Analysts at investment banks working on the listing of Viva Energy have valued the group at between $4.3 billion and $6.2 billion as plans for its initial public offering are ramped up.
Viva, which also owns a network of more than 20 fuel import terminals, is expected to raise up to $3 billion in its initial public offering.
That would make it the biggest float since health insurer Medibank Private joined the Australian Securities Exchange in 2014, raising $5.7 billion for the federal government.
UBS analysts say Viva’s equity is worth $4.79 billion to $6.24 billion, while those at Deutsche Bank have its value at $4.87 billion to $5.43 billion.
Analysts from Bank of America Merrill Lynch, meanwhile, say the business has an enterprise value — a sum that also accounts for debt — of $4.3 billion to $5.1 billion, although Viva only has about $78 million of debt so the equity value would be similar.
In research released to fund managers yesterday, Deutsche Bank analysts described Viva Energy as one of Australia’s leading integrated downstream petroleum companies.
It supplies products to consumers through a national network of 1165 retail sites — most of them operated under its alliance with grocery chain Coles, which will soon be spun out of Wesfarmers.
Viva also has a stake of almost 40 per cent in the Viva Energy Real Estate Investment Trust, which owns hundreds of petrol stations.
The Geelong refinery is the second biggest in Australia by capacity, sourcing more than 40 million barrels of crude oil and selling more than 14 billion litres of fuel products to retail and business customers last year.
Viva is owned by Swissbased oil heavyweight Vitol, which is the biggest oil trader in the world and trades about 7 per cent of global petroleum volumes.
The business says it has in- vested heavily and it has low debt, setting it up well for the future.
Vitol and a suite of its backers struck a deal with Royal Dutch Shell to buy its Australian petrol stations and other assets in 2014 for $2.9 billion.
The Australian business was renamed Viva Energy, and it has since sold off property assets through an initial public offering of the real estate in- vestment trust. Viva generates $650 million in annual earnings before interest, tax, depreciation and amortisation.
It expects to lodge its prospectus on June 21.
The company also generates revenue from customers in key industry sectors, including aviation, marine, transport, resources and construction and manufacturing sectors.