Viva Energy closes IPO cornerstone book at $1.3 billion

Sarah Thompson, Anthony Macdonald & Julie-anne Sprague
June 18 2018
AFR

About half a dozen funds have tipped the first $1.3 billion into fuel retailer and refiner Viva Energy’s initial public offering.

The funds, from Australia and Asia, expect to be notified of their allocations on Monday after Viva Energy’s brokers ran a cornerstone process last week.

For everyone else, it means Viva Energy will come to market with roughly half of its IPO shares pre-sold.

And perhaps more importantly, it means Viva Energy owner Vitol is committed to seeing the business to the ASX-boards at a time when float contenders have had the wobbles.

Viva Energy’s cornerstone process asked fund managers to make volume bids across a price range of about 6.5-times to 7-times forward EBITDA.

The exact price cornerstone backers and everyone else pays for shares will be determined at a bookbuild next month. A prospectus is due with ASIC this week.

Viva Energy is one of the country’s biggest fuel companies. It has 24 per cent of the downstream petroleum market, selling fuel and fuel products via the Shell brand in Australia and a refinery in Geelong. 

Broker UBS expects it to report $634 million EBITDA in the 2019 financial year.

It is expected to seek to raise about $2.5 billion via the sale of about a 60 per cent stake in the company.