Investment banks line up for VicRoads sale mandate

Heavy traffic on Victoria's West Gate Freeway. Picture: Sarah Matray

The Victorian government is believed to be launching a beauty parade to find an adviser for the sale of its motor registry unit VicRoads.

It comes after investment bank Morgan Stanley has already undertaken a scoping study on the state-owned asset.

Also working with Morgan Stanley has been KPMG.

Expectations are that the Victorian government will likely choose an advisory firm that has an executive with strong infrastructure investment banking credentials and is based in Melbourne.

Morgan Stanley will likely be in contention for the advisory role, but its Melbourne-based co-head of Australian investment banking, Julian Peck, has since joined APA Group.

Mr Peck specialised in infrastructure.

Others that could be in contention are JPMorgan, which has its infrastructure banker Jim Miller based in Melbourne, or Melbourne-based Sam Kyprianou at Barrenjoey Capital, while Lazard’s Andrew Leyden, who has strong credentials in the infrastructure space, is also Melbourne-based.

Victoria confirmed at the start of the month that the unit was to be privatised by the Andrews state government.

The plan by the state government is to retain the revenue from the unit’s registration and licencing fees and create a new joint venture, of which it will own a small stake, that would operate the unit.

The government would then pay that unit a fee from the revenue collected.

The venture would upgrade the unit’s IT infrastructure systems to deliver more services online .

Treasurer Tim Pallas said last month that the private sector provider would be required to take a “substantial stake” in the joint venture to bring about “effective and efficient delivery of a quality IT system” which he said was currently struggling.

The process is set to get underway this year.

Earlier, the expectation was that the asset could be worth about $2bn.

One of the likely suitors is expected to be Macquarie Infrastructure and Real Assets, which has purchased state land registry units throughout the country.