QUEENSLAND MOTORWAYS SOLD FOR $7 BILLION BY QIC LTD

Louise Brannelly The Courier-Mail April 24, 2014

Brisbane's Clem 7 tunnel which is managed by Qld Motorways. Source: News Limited

 

THE State Government's investment arm QIC Ltd has sold tollway operator Queensland Motorways for more than $7 billion, a price higher than many expected it would secure. 

The successful bidder was a consortium comprising Transurban, Australian Super and Tawreed Investments, a subsidiary of the Abu Dhabi Investment Authority.

The sale, for $7.057 billion, including stamp duty, is subject to conditions and expected to be completed before the end of September.

It ranks as one of the biggest corporate deals in Australia in recent years.

Many analysts had speculated QIC would only be able to get from $5 billion to $6 billion for the 70km network of tolled roads, bridges and infrastructure.

Queensland Motorways assets include the Gateway, Gateway Extension and Logan motorways, Brisbane's Go-Between Bridge, CLEM7 tunnel and the planned Legacy Way motorway due to open in 2015.

QIC chief executive officer Damien Frawley said the Queensland Motorways business was held by QIC on behalf of the State's Defined Benefit Fund, which provides for the superannuation obligations of current public servants.

"The result is a great outcome for the Defined Benefit Fund, with the net proceeds from the sale to remain in the Defined Benefit Fund to meet public sector superannuation liabilities to existing members," he said.

The state government transferred the business - which at the time included just the Gateway and Logan motorways - to QIC to manage in May 2011 for a market-value price of $3.088 billion.

Mr Frawley said QIC had made substantial progress in commercialising the business since taking over three years ago, installing a highly experienced board and management team.

"They have substantially expanded the road network, including through the unique, unsolicited transaction with Brisbane City Council on Legacy Way and the Go Between Bridge, and the purchase of the CLEM7 motorway for an attractive price," he said.

"There was a high level of interest in the sale process, with a number of competing consortia comprising committed and competitive local and international institutional investors and strategic industry players."

The others bidders were believed to include consortiums with Singapore's government-owned wealth fund GIC, toll-road business Abertis and the Malaysian Government's strategic investment fund Khazanah Nasional Berhad.

Mr Frawley said the Transurban consortium, which the market had considered the frontrunner in the bidding process, has a long-established track record in successfully owning and operating similar assets.

A Transurban spokesman was not available for comment last night.

Chairman Lindsay Maxsted, who was in Brisbane earlier this month to meet local business leaders, said Queensland Motorways was a good fit for his ASX-listed company.

"This has been a quality asset for a long time," he said. 

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