Caltex has reportedly announced to sell and leaseback about a quarter of its USD 2 billion worth real estate and petrol station land assets after undertaking a year-long review. As per trusted sources, the company is likely to retain its infrastructure and fuel assets such as refineries and pipelines.
According to a statement released by Caltex, the company has been holding talks to form a potential strategic real estate partnership with experienced associates. This would enable the company to benefit from development gains and market value, and allows assessment of the advantages of the partnership structure with the prospect of advancing the monetization.
Reportedly, Caltex has been reviewing infrastructure and real estate assets such as 65 fuel depots, 417 freehold petrol station sites, five pipelines, and 18 terminals within the group.
Speaking on the firm’s sell-off bid, Chief Financial Officer of Caltex, Simon Hopworth was reportedly quoted stating that the sale represents the convenience of the network as a whole and doesn’t target any specific part or geography of the overall network.
The 2018 half-year financial results published by Caltex take note of the Convenience Retail real estate review which has highlighted that the passive leaseback transaction and real estate sale is not financially compelling in isolation for the firm. The reason for the same has been cited as the proceeds accrued from sales are largely offset by the assumption of the associated lease liabilities.
The press release further mentions that the review underscores the opportunity to manage the Convenience Retail real estate more proactively as it is a vital asset that underpins the long-term retail strategy of the firm.
Registering its lowest level since July, the share price of Caltex has recently witnessed a 7.87 per cent decline, cite sources. Reportedly, the shareholders of the company have attributed the slump in the share price to the lack of details around the potential sale of real estate assets and the reduction in the year on year dividend.