Vitol Group and Carlyle Group have announced plans for a stock market listing of their European refiner and fuel service station operator Varo Energy. There is also talk of IPO for Viva Australia .
Varo, also owned by Dutch investment firm Reggeborgh Invest, is expected to list shares on the Amsterdam stock exchange “in the coming weeks”. It is aiming for a valuation of €2bn. Varo, which operates refineries in Switzerland and Germany with crude processing capacity of 165,000 barrels a day, produces and supplies fuels from diesel and petrol for cars to fuel oil for ships and bitumen for road construction. It also has 144 fuel distribution facilities and 232 fuel service stations.
Shareholders intend to sell 30-40 per cent of their combined shares, with no new issued, meaning the move will enable existing stakeholders to sell out. “Bringing Varo to the public markets will enable us to access capital, strengthen our brand and further improve our position as an integrated fuel supply company,” said Roger Brown, chief executive of Varo.
Plans for an IPO come as Europe’s refineries have performed well during a collapse in oil prices that boosted margins as demand for refined products remained robust. These businesses have been favored by investors and energy majors alike for generating profits even as exploration and production arms have suffered.
Adjusted earnings before interest, tax, depreciation and amortisation increased by 13 per cent to $371m in 2017 from the prior year. Revenues rose by 28 per cent over the same period to $13.4bn. Credit Suisse, Deutsche Bank and ING are the lead banks on the deal.
PetrolWorld also note that rumours persist that Vitol, is understood to have kicked off early preparations for a float of the Viva business in Australia, which comprises a refinery in Geelong and a network of about 20 fuel import terminals and could be worth as much as $5 billion in total.
The commodities trader is understood to have hired Bank of America-Merrill Lynch and Deutsche Bank to handle a potential IPO. The final size of the float depends on the scale of the sell-down of the business, which also owns interests in about 1100 Shell-branded fuel service stations.
A Viva Energy spokeswoman declined to respond to "market speculation", while signalling that potential alternative ownership structures for the business are being examined. But sources said the Australian leg of a non-deal investor roadshow is taking place this week with the aim of an IPO by June 30 involving a raising of between $2 billion and $3 billion. PWKD20032018 web: www.varoenergy.com
PetrolWorld Library: Please note news items in PW Library related to the Viva IPO from 21st March 2018