Petrol supplier Ampol has offloaded half of its service station properties as part of a $682 million property deal with Charter Hall and sovereign wealth fund GIC.
Charter Hall, in partnership with GIC, will take a 49 per cent stake in 203 freehold Ampol petrol stations—currently branded Caltex—through an unlisted property trust.
Charter Hall will secure a 5 per cent stake, worth $34 million, in the platform, with the bulk of ownership weighted towards GIC.
Under the terms of the deal, which is due to complete by year’s end, Ampol will own a 51 per cent controlling interest in the property trust and keep operational control of the convenience retailing sites.
The sites will be leased back to Ampol under contracts with an average duration of 19.2 years.
After the takeover was shelved, Ampol confirmed plans to embark on a $1 billion float or trade sale of a half stake in a large portfolio of service stations that it owns and runs, led by newly-appointed chief executive Matt Halliday.
The Montreal-based convenience store chain and privately-owned British company EG Group had both been vying for Caltex’s Australian listed infrastructure and refinery company before the Covid-19 pandemic struck.
Charter Hall chief executive David Harrison said the group had a 15-year relationship with GIC and and both were committed to building platforms with a focus on long leases and strong underlying fundamentals.
“This off-market transaction follows regular dialogue with the Ampol team over the past two years and reinforces our confidence in the convenience retail sector,” Harrison said.
“[The deal] further grows the breadth of this multi-sector relationship and reflects our strong market position.”
Ampol initially intends to use the proceeds to reduce debt given the uncertainty around Covid-19, with continued travel restrictions in Australian states and territories potentially weighing on the impact on oil demand.
Ampol said it intends to use the trust as a platform to potentially acquire future sites and will sell additional Ampol sites into it over time.
Halliday said the transaction represented compelling value in volatile market conditions.
Moody’s vice president Ian Chitterer said the deal is credit positive in the short term for Ampol, but reduces long-term flexibility.
“Despite this short-term benefit, we view the transaction as credit negative in the longer term as Ampol will lose the financial flexibility to monetise key sites, if required.”