Transurban takes full control of WestConnex in $11 billion deal | pwhatch
A consortium led by toll road giant Transurban will take full control of Sydney’s WestConnex after winning the NSW government’s auction of its 49 per cent stake in the road, with a bid of more than $11 billion.
NSW Treasurer Dominic Perrottet said on Monday morning that the state had finalised the sale to Sydney Transport Partners , consisting of Transurban, AustralianSuper, the Canada Pension Plan Investment Board, Abu Dhabi’s sovereign wealth fund, and new member Caisse de dépôt et placement du Québec.Total sale proceeds for the state were $11.1 billion, Mr Perrottet said. When completed, the WestConnex project will form a 33-kilometre network linking Western Sydney with Sydney’s CBD, Sydney Airport and Port Botany. The massive project has been opened in stages over the past four years. A widening of the M4 opened to traffic in July 2017, the new M4 Tunnels opened in July 2019, and the M8 opened in July last year. The M4-M5 Link is expected to be open to motorists by the end of 2023 and there is a planned underground multi-level interchange at Rozelle. STP bought a 51 per cent stake in WestConnex in 2018 for $9.26 billion and will own 100 per cent of Australia’s largest toll road project after the NSW government put the remaining share up for sale in two 24.5 per cent tranches in November 2020. “This transaction continues our successful asset recycling strategy, which has been the cornerstone of our record $108.5 billion infrastructure pipeline that has built and upgraded schools, hospitals, road and rail across the State,” Mr Perrottet said. Transurban said it would raise $4.22 billion of new equity to cover its portion of the sale. Of that, $3.97 billion will be through a 1 for 9 entitlement offer to eligible shareholders at a price of $13 — an 8.3 per cent discount to its closing price of $14.18 on FridayAustralianSuper — which is an investor in the ASX-listed Transurban as well as an STP member — and 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. “WestConnex is one of the largest road infrastructure projects in the world with an enterprise value of $33 billion based on this transaction,” said Transurban chief executive Scott Charlton. “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 or 4 per cent, and then by inflation for the 20 years after that.
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