Transurban is buying the AirportlinkM7 toll road in Brisbane for $1.87 billion, about half what it cost to build three years ago.
The toll road operator is also raising $1.025 billion in a rights issue to pay for the acquisition and to reduce debt.
The whole deal, after paying $108 million stamp duty, plus $23 million in transaction costs, will cost an a little more than $2 billion.
The purchase of the toll road, a tunnel connecting Brisbane Airport with Brisbane’s CBD and northern, southern and western suburbs, is being done through Transurban Queensland which is 62.5% owned by the Transurban group. The other shareholders are AustralianSuper and Tawreed Investments.
Transurban CEO Scott Charlton says the acquisition enhances Transurban Queensland’s existing network position in Brisbane.
“AirportlinkM7 is a quality urban asset with observed traffic history and substantial additional capacity,” he says.
The toll road is 6.7 km in length, cost $3.7 billion to build, and opened to traffic in July 2012. In 2015, it brought in $83 million in revenue.
To help pay for the acquisition, Transurban announced a 1 for 18 rights issue to raise $1.025 billion at $9.60 a share, a 4.9% discount to yesterday’s $10.10 close.
Transurban, a top 20 ASX listed company with market cap of about $19 billion, operates toll roads including Sydney’s Lane Cove Tunnel – which Transurban bought for $630 million in 2010, three years after the $1.1 billion build sent the developer into receivership – and Melbourne’s CityLink.
A short time ago, Transurban was trading at $10.32.
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