Transurban to raise $700m as it scoops up remaining stake in M5 West toll road

Transurban will pay $468m to buy up the remaining stake of its M5 West toll road in Sydney.

Transurban is raising $700m to help fund the buy out of the 34pc stake in the M5 West toll road it doesn’t already own.

Toll road giant Transurban will pay $468 million to scoop up the remaining stake of its M5 West road in Sydney, funded by a share placement, amid a fall in its annual net profit on WestConnex costs and a hike in the depreciation of its assets.

Transurban (TCL) — which last year bought a majority stake in Sydney’s $16 billion WestConnex motorway project — will buy the remaining 34 per cent of the M5 West from IFM Investors and Utilities Trust of Australia giving it full ownership of the road.

A underwritten $500m share placement at an offer price of $14.70 and a non-underwritten $200m security purchase plan will be issued to fund the M5 West deal and for general corporate purposes.

Transurban saw its annual statutory net profit fall by more than half to $170m compared with $468m a year ago, while revenue jumped 26 per cent to $4.16bn.

Proportional earnings before interest, taxation, depreciation and amortisation, reflecting income from Transurban’s stakes in toll road assets, fell 4.4 per cent to $1.69bn with proportional toll revenue up 10.3 per cent to $2.58bn in line with forecasts.

The transport operator expects to deliver shareholders an annual dividend of 62c per share from last year’s 59c per share payment.

Transurban said early traffic performance of its WestConnex M4 East tunnel in Sydney was ahead of its investment case after it opened three weeks ago.