A man fills his car with gasoline at a Chevron fuelling station in San Francisco. The US energy firm is offering 135mn shares in Caltex Australia at a floor price of A$34.20 each.

Reuters/Hong Kong/Sydney

US energy firm Chevron is seeking to sell its entire stake in Caltex Australia for about A$4.6bn ($3.6bn), exiting Australia’s biggest refiner after nearly 40 years as falling oil prices and high costs hurt margins.
A successful sale of Chevron’s 50% stake, which the company is offering at a discount to market prices, would make the deal Asia’s largest block transaction after the government of India raised $3.6bn by selling a stake in Coal India in January.
Chevron is offering 135mn shares in Caltex at a floor price of A$34.20 each, a 9.7% discount to yesterday’s close, according to a term sheet of the deal seen by Reuters. Caltex shares have risen 10.7% this year, outpacing a 9.4% rise in the benchmark Australian share index.
A halving in global oil prices since mid-2014 has added to the pressures on Australian refiners, which are grappling with ageing equipment, cheaper imports and high costs.
Many firms, including Caltex Australia, have closed refiners while others have restructured operations.
Chevron is the latest global major to exit Australia’s refining industry. Last year, Royal Dutch Shell sold its Australian petrol station and refinery operations for A$2.9bn and BP, which shut down its Bulwer Island oil refinery in Queensland, is also selling its Australian bitumen business.
In a statement, a Caltex spokesman said that Chevron had made clear its sale was part of a broader portfolio review. “There will be no change to our ability to reliably and competitively deliver all our customers’ fuel requirements,” the spokesman added.  Australia has experienced a rush of block trades in the past month as investors look to capitalise on frothy valuations following a share market that is rising on hopes of more rate cuts.
Goldman Sachs is the sole underwriter for the deal, the terms showed.


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