The $2 billion float of one of Australia's biggest petrol station owners, Viva Energy, has cleared a major hurdle after seeing off a legal challenge from retail giant Coles.
Coles' subsidiary Eureka took Viva Energy to the Supreme Court of Victoria in early November to try and halt the proposed restructuring of the Shell/Coles Express service station business throughout Australia.
Viva has been investigating the formation of a real estate investment trust, but was stymied when Coles took issue over how its leases would be impacted.
Coles and Viva first entered into an Alliance agreement in 2013 to lease the sites as Shell/Coles Express until 2024.
Under the deal, Viva delivered the fuel and maintained the stations' infrastructure.
Coles has also raised concerns that a REIT would limit its ability to have the first right of refusal on the sale of any of Viva's sites.
In a 93-page judgment, released on Friday, Justice Clyde Croft, in the Supreme Court of Victoria ruled in favour of Viva Energy, saying he could not find that a proposed REIT would impact on the lease contract between Coles and Viva Energy.
In response a Coles Express spokesperson said: "Coles Express remains committed to its partnership with Viva, and we will continue to work together to provide Australian motorists value at the bowser and a great convenience range in Coles Express stores.
"We are examining the court's decision and will consider our options."
Viva has been reviewing a potential float of the stations, which are seen as lucrative, particularly with an alliance to a supermarket where customers can so some grocery shopping while filling up the tank.
In a statement Viva Energy said it acknowledges the decision of the Supreme Court of Victoria in relation to the matter of Eureka (Coles Express) and Viva Energy Australia concerning an issue arising out of the Alliance agreement between the parties.
"The Court ruled in favour of Viva Energy," the statement says.
"Viva Energy remains committed to the Alliance and is excited about the opportunities to grow the retail business with Coles Express.
"We will continue to explore the option of establishing a real estate investment trust, although no decisions have been made at this time."
Viva is owned by the Dutch group Vitol, which last year paid $3 billion for Shell Australia's downstream businesses including the Geelong Refinery and a network of 870 retail service stations, of which about 620 stations are leased by Coles Express.
Placing them into a REIT was seen as the next logical step for growth and financing.
