Bridget Carter
Mergers and Acquisitions Editor
Sydney DAVIDSON Kempner Capital Management has been named among hedge funds that purchased up to $1.4 billion worth of distressed debt from lenders on the failed toll road owner BrisConnections.
The original financiers offloaded the loans for almost 50c in the dollar, according to sources, ahead of a critical deadline that prohibits the groups selling down their positions.
Financiers understood to have sold loans included BNP Paribas, ANZ Bank, Societe Generale and DZ Bank.
The four sellers of loans on BrisConnections were each thought to have exited positions with an individual face value of about $350 million.
New York-based Davidson Kempner Capital has almost $US21.3bn ($23bn) of assets under management and joined other offshore groups buying into the troubled asset.
Sources yesterday said they believed other buyers included hedge funds which had also purchased some of the $US5.8bn worth of debt owing on an Indiana toll road in the US. Strategic Value Partners and King Street Capital were among investment groups that purchased the almost $US500m debt.
BrisConnections, which operates the AirportLinkM7, is in the hands of receivers PPB advisory, with debts of more than $3bn. PPB secured control of the 6.7km toll road early last year, seven months after it opened.
A sale of the debt comes as debate continues over whether a planned disposal process for the asset would proceed.
This was despite assumptions that BrisConnections would be sold to Transurban in the months after the listed toll road operator purchased Brisbane’s Queensland Motorways network for a bullish $7.06bn. Fort Street Advisers was appointed by creditors to handle a sales process for the asset, which was suspended in January while the auction of Queensland Motorways took place.
Holding up the sales process is believed to be debate among the lenders on the value of the asset. Some are refusing to sell for less than 60c in the dollar, 15c more than others would accept.
Sources said the recent flurry of trades by the banking syndicate was triggered by a request from advisers for the groups to sign up to a “stand still” agreement, which would block any debt trading for a period of time, ahead of the sales process.
TCL Price at posting:
$8.24 Sentiment: Hold Disclosure: Held
(20min delay)