The New South Wales Government has today finalised the sale of its remaining 49 per cent stake in WestConnex, the largest road infrastructure project currently underway in Australia.
Sydney Transport Partners (STP), an over 70 per cent Australian-owned consortium made up of Transurban, AustralianSuper, Canada Pension Plan Investment Board and Tawreed, has acquired the 49 per cent equity stake for $11.1 billion, with the acquisition taking STP’s interest in WestConnex to 100 per cent.
In 2018, STP purchased a 51 per cent stake in WestConnex for $9.26 billion. The NSW Government has now received $20.4 billion from the sale of the entire WestConnex project.
Noting that revenue from the sale of the first 51 per cent of WestConnex was used to fund the vital M4-M5 Link as well as other infrastructure throughout Western Sydney, NSW Treasurer Dominic Perrottet said the latest sale was part of the state government’s asset recycling strategy.
“This transaction continues our successful asset recycling strategy, which has been the cornerstone of our record $108.5 billion infrastructure pipeline that has built and upgraded schools, hospitals, road and rail across the State,” Mr Perrottet said.
“This sale is part of our prudent, long-term strategy to bolster the State’s finances, while also supporting the NSW economy by investing in job creating projects that will drive our COVID economic recovery.”
The NSW Government launched the sale process for its remaining 49 per cent stake in WestConnex in November 2020.
The sale was structured as a two-tranche process to maximise competition. STP was the successful bidder for both 24.5 per cent stakes.
Net proceeds from the sale will be invested in the NSW Generations Fund (NGF) – the State’s sovereign wealth fund – as required by legislation – before being used to retire an equivalent amount of debt.
Transurban owns 50 per cent of STP alongside its strategically aligned partners, including new partner Caisse de dépôt et placement du Québec (CDPQ).
Transurban Chief Executive Officer Scott Charlton said the WestConnex now had an enterprise value of $33 billion based on the latest transaction.
“WestConnex is one of the largest road infrastructure projects in the world with an enterprise value of $33 billion based on this transaction. WestConnex is a key component of the NSEW Government’s integrated transport plan to ease congestion and connect communities in Sydney,” Mr Charlton said.
Transurban plans to raise $4.22 billion of new equity, including $3.97 billion through a fully underwritten Entitlement Offer to eligible security holders. With approximately 40 years concession life remaining for WestConnex, Transurban is expecting to receive more than $600 million of potential Capital Releases until financial year (FY) 2025 from its increased stake in WestConnex.
WestConnex is Australia’s largest toll road project. When complete in 2023, WestConnex will provide motorists with a continuous 33-kilometre traffic-light free motorway network linking Sydney’s west to Sydney CBD, Sydney Airport and Port Botany.
By 2031, 40 per cent of the Sydney population is expected to live within 5 kilometres of WestConnex. The NSW Government expects WestConnex to provide travel-time savings of approximately 40 minutes between Parramatta and Sydney Airport.
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