Caltex to sell up to a quarter of its convenience retail assets

The Australian company is considering to sell and leaseback $2 billion (15-25%) of its petrol station land via a long-term partnership with Caltex retaining a 25-50% stake.

“Caltex is now exploring with appropriately experienced partners, a potential strategic real estate partnership,” the company announced on Tuesday. This move includes real state and infrastructure assets valued at $500 million, with refineries and pipelines excluded.

The sale runs the breadth of Caltex’s network as it foresees to benefit from “market value and development gains with a view to further monetisation where value can be demonstrated.”

The movement would come after its fuel and infrastructure division reported a 1% increase in profit for its first half of 2018; as the earnings rose by 9%. Net profit shot up 45% to $383 million in 2018, from $265 million in the first half of 2017. Despite reporting its strongest first half in six years, Caltex shares fell on Tuesday 7.5% to $30.81 - their lowest level since July.

Whilst the Managing Director and CEO Julian Segal believes this figure shows the company's on-going transformation “primed for sustainable growth”, one shareholder (BKI Investment) argued that this flopping down might be due to the investors’ uncertainty regarding the potential sale of real state and the company cutting the dividend.