Company News

Caltex Australia to get $92 mln from first tranche of convenience store sales

Dec 5 (Reuters) - Caltex Australia said on Thursday it expects to receive about A$136 million ($92.29 million) from the sale of its first tranche of 25 convenience store sites as it looks to strengthen its capital position.

The company, which has been approached for a takeover by Canadian convenience store operator Alimentation Couche-Tard Inc , rejected a sweetened A$8.61 billion bid but left the door open to a higher offer.

Caltex said on Tuesday the offer did not take into account the consistent performance and international growth trajectory of its fuels and infrastructure business, or the significant opportunities for its convenience retail business.

The offer disclosed last week would have restricted Caltex from selling its assets, potentially hampering plans for an initial public offering of up to 49% of its 250 convenience retail sites.

Caltex expects net cash proceeds of about A$92 million from the first tranche of sales. The second tranche is slated for early 2020.

The Australian petrol pump and convenience store operator is under pressure to turn around its business due to weak consumer demand and margin pressures.

The review of its retail network has allowed Caltex to free up capital from sites not suitable for upgrades but with high value suitable for alternative uses, Managing Director and Chief Executive Julian Segal said in Wednesday’s statement.

Caltex also said it would undertake an issuance of A$300 million to A$500 million AUD denominated hybrid capital securities, as part of its capital management strategy. ($1 = 1.4736 Australian dollars) (Reporting by Niyati Shetty in Bengaluru Editing by Sonya Hepinstall)