A consortium led by toll road giant Transurban (TCL) is buying full control of Sydney’s WestConnex road system for more than $11 billion after winning the NSW government’s auction of its 49% of the business.
NSW Treasurer Dominic Perrottet said on Monday that the state had finalised the sale to Sydney Transport Partners (STP), consisting of Transurban, AustralianSuper, the Canada Pension Plan Investment Board, Abu Dhabi’s sovereign wealth fund, and new member, Canada’s Caisse de dépôt et placement du Québec.
Transurban told the ASX that it will raise $4.22 billion of new equity from securityholders to fund its portion of the deal.
Of that, $3.97 billion will be raised through a 1-for-9 entitlement offer to eligible securityholders at a price of $13 — an 8.3% discount to its closing price of $14.18 on Friday
AustralianSuper — which is an investor in the ASX-listed Transurban as well as a consortium member — will buy $250 million of shares at $13.07 each in addition to taking up all the shares available to it under the entitlement offer.
That will take TCL’s total raising to $4.247 million.
“WestConnex is one of the largest road infrastructure projects in the world with an enterprise value of $33 billion based on this transaction,” Transurban CEO Scott Charlton said in a statement yesterday.
“We feel privileged to take Sydney Transport Partners’ holding in this critical asset to 100 per cent.”
Transurban will control the road until 2060. Between now and 2040, Transurban can increase tolls on the road every year by the greater of inflation (consumer price index) or 4%, and then by inflation for the 20 years after that
Treasurer Perrottet said the latest sale was structured in two tranches to maximize competition and achieve the best price.
“This transaction continues our successful asset recycling strategy, which has been the cornerstone of our record A$108.5 billion infrastructure pipeline that has built and upgraded schools, hospitals, road and rail across the state,” Mr Perrottet said.
He said net proceeds from the sale will be invested in NSW state’s sovereign wealth fund, before being used to retire an equivalent amount of debt.