Brisbane toll road group to be put on block

Transurban

Momentum is building for the sale of the $1.3 billion-plus BrisConnections, with Transurban and its partners, Australian Super and the Abu Dhabi Investment Authority, returning to acquisition mode to secure the troubled Queensland toll road operator.

Investment bankers working on the asset sale, Fort Street Advisers and Macquarie Group, are tipped to launch a global roadshow over the next two months to promote the operator of the 6.7km Brisbane AirportLinkM7 road to interested buyers.

The Queensland Investment Corporation is also believed to be considering whether to weigh in on the upcoming sales process, while other suitors are thought to be Hastings Funds Management, AMP and IFM.

Some question whether large global pension funds will take on the local suitors because many would be unable to compete with listed toll road operator Transurban due to the synergies that already exist.

BrisConnections has always looked to be a perfect fit for Transurban, which owns the connecting motorway network, Queensland Motorways, with ADIA and Australian Super, after it purchased it in 2014 for a bullish $7bn price tag.

BrisConnections collapsed with debts of more than $3bn in 2013, seven months after it opened.

However, since that time, the original lenders have offloaded debt for about 50c in the dollar.

More than 30 per cent of the debt was purchased by Macquarie Group.

Macquarie was initially thought to be a logical buyer for the assets through the acquisition of debt held by other lenders.

The price that the Macquarie snapped up BrisConnections debt for, values the toll road at roughly between $1.3bn and $1.5bn. But it is thought that toll road operator Macquarie Atlas would not be sitting in on the sales process.

An interesting observation will be whether standstill arrangements will apply for the holders of debt on the road connecting central Brisbane to the city’s airport, including Macquarie, where they will be restricted from offloading loans with a sales process looming.

One of the factors influencing the sales price will be the decline in traffic volumes due to flat growth in Queensland and a toll price increase on the airport link.