The Board of Viva Energy has approved $300m of funding to upgrade its Geelong Refinery’s processing capability to produce Ultra-Low Sulphur Gasoline. Credit Suisse notes the cost is around $50m higher than the prior company estimate.
The Federal government’s contribution of $125m is unchanged.
In an acquisition complementary to the refining operations, the company also announced an agreement to acquire LyondellBasell Australia, a Geelong-based polymer manufacturer and distributor.
The broker retains its Outperform rating and $2.57 target price.
Sector: Energy.
Target price is $2.57.Current Price is $2.64. Difference: ($0.07) – (brackets indicate current price is over target). If VEA meets the Credit Suisse target it will return approximately -3% (excluding dividends, fees and charges – negative figures indicate an expected loss).
