Prospective investors are expected to learn the price of the Dalrymple Bay Coal Terminal as early as Wednesday afternoon, with the private equity owner Brookfield pressing on with its initial public offering of the asset despite the result of the US election being too close to call.
DataRoom understands that the pricing will involve a yield offered to investors of between 6.75 per cent and 7 per cent.
It comes after analyst research was released on the coal terminal last month, with Credit Suisse suggesting that the Queensland infrastructure asset was worth between $3.25bn and $3.56bn, including debt.
Brookfield was hoping to raise between $800m and $1bn for its IPO, with the terminal’s market value to be between $1.6bn and $1.7bn.
It was earlier believed that Brookfield had been hoping for a yield of around 6 per cent but may have needed to lock in a 7 per cent yield to secure strong demand.
The understanding is that Brookfield has been targeting retail investors for the IPO at a time a number of institutional investors shy away from gaining exposure to assets linked to the coal industry.
The Queensland Investment Corporation was earlier thought to be an investor.
Bank of America, HSBC, Citi and Credit Suisse are working on the float, while co-lead managers include Wilsons, Ord Minnett, Bell Potter and Morgans.
The DBCT is one of Queensland’s major metallurgical coal export facilities that handles about 20 per cent of the world’s seaborne metallurgical coal trade and will be sold with take or pay contracts in place.
Brookfield gained control of the terminal during the financial crisis in 2009 when it embarked on a $1.8bn recapitalisation of Babcock and Brown Infrastructure, which essentially comprised the DBCT.
The float is moving ahead despite uncertainty surrounding the outcome of the US election.
Market sources on Wednesday said the return of Donald Trump as president would be a positive for the markets, given that he would refrain from increasing tax for corporates, a major plus particularly for those operating in the technology space.
Both democratic leader Joe Biden and President Trump would likely offer stimulus for the economy.
Yet with soggy market conditions, some say that smaller listing prospects may struggle to gain support.
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