$11.1bn deal for full Westconnex control

TRANSURBAN and its investment partners have paid $11.1bn to buy the remaining 49 per cent stake in Westconnex, Sydney’s biggest motorway project, in a blockbuster deal for the NSW government.

The $11.1bn payday for the 33km motorway, combined with the original 51 per cent stake sold for $9.26bn in 2018, hands the state government $20.4bn from selling off Australia’s largest infrastructure project. Cash from the sale will be invested in the NSW Generations Fund – the state’s sovereign wealth fund – before being used to retire an equivalent amount of debt. The original $9.26bn deal was used to fund the M4-M5 final stage of Westconnex along with future infrastructure across the state.

Transurban said it will launch a $4.2bn-plus equity raising to pay for the acquisition, along with $1.41bn in cash for an overall $5.56bn outlay for its 50 per cent stake.

Some $3.97bn of the $4.2bn will be raised through a onefor-nine rights issue at a price of $13 per security, representing an 8.3 per discount to Transurban’s last closing price on September 17.

Transurban has also agreed for a $250m share placement to Australiansuper, a partner in its consortium, at $13.07 a share in addition to the superannuation giant taking up its full entitlement under the deal.

No additional debt funding is required and the deal to acquire full control of the toll road is expected to generate $600m in more capital releases until the 2025 financial year.

“This transaction continues our successful asset recycling strategy,” NSW Treasurer Dominic Perrottet said.