Brisconnections, page-9

The sale process is hotting up.
A few facts.
It cost 3.2B AUD to build. Fortunes were lost.
It is expected to sell for 1B AUD.

IFM paid 32 times EBITDA for the Indiana Toll Road.
So there are determined buyers, but it is hard to see anyone beating TCL due to access to synergies alone. 5 Toll Roads nearby.

Airportlink's $69m pitch to Transurban rivals

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The sale required months of negotiations with BrisCon's lenders to get them to agree to a standstill agreement in an effort to ensure the auction's integrity. Glenn Hunt

• by
• Sarah Thompson
• Anthony Macdonald
• Jake Mitchell

Up-for-sale Brisbane tollroad Airportlink may be a high margin and highly efficient asset, which could see more traffic as competing roads become more congested. But it is almost impossible to see how any bidder could stop Transurban from adding Airportlink as the sixth and final piece of its Queensland portfolio.
Airportlink advisers Fort Street Advisers and Macquarie Capital kicked off Airportlink's sale on Thursday morning, with the release of a teaser document to potential buyers introducing the road and its financial metrics.
The 6.7-kilometre road was expected to record $55 million earnings before interest, tax, depreciation and amortisation in the 2015 financial year, increasing to as much as $69 million in 2016.
The flyer, obtained by Street Talk, said an average 51,577 vehicles used the road each day in the June quarter and 85.5 per cent of users during the 2015 financial year were passenger vehicles.
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AFR graphic
It said Airportlink's current owner, the bankrupt BrisConnections, owned the road's concession until July 30, 2053, which means any new owner get the asset for 38-years.
Importantly, the road cost $3.2 billion to build and is now expected to be worth about $1 billion. Even under the most aggressive sale forecasts - and using IFM Investors' eye-popping purchase of Indiana Toll Road at 32-times EBITDA in March as an example - the road would be worth $1.76 billion.
The flyer pitched Airportlink as a best-in-class road with high margins, stable operational and earnings performance and a favourable earnings outlook. It said the road had highly efficient tolling and back office systems and there was scope to renegotiate or amend and extend the operations and maintenance contract in the near term.
And it also flagged the network development opportunities.


But you have to wonder how any interested and rational party could out-bid Transurban. The $19 billion Australian owns concessions to Brisbane's five other tollroads and would have synergies across back office, tolling and maintenance which could never be matched by another bidder.
Transurban is known to be interested and has appointed UBS to advise on the bid, as Street Talk reported on May 1.
Flagstaff and Macquarie, working on behalf of receiver PPB Advisory and the lending group, are expected to target those parties which missed out on the now Transurban-owned Queensland Motorways portfolio to get a competitive auction underway.
There is a bucketload of money for core infrastructure assets and it will be interesting to see whether the likes of Hastings Funds Management, IFM Investors and Spain's Abertis Infraestructuras may be tempted to take on Transurban once again.