AIX to sell Sydney light rail interests

Australian Infrastructure Fund, which is managed by Hastings Funds Management, has agreed to sell its 38.9% stake in Metro Transport Sydney to the New South Wales government. The stake is expected to fetch more than A$8m.

Australian Infrastructure Fund (AIX), which is managed by Australian fund manager Hastings Funds Management, has agreed to sell its 38.9 percent interest in Metro Transport Sydney (MTS) – the owner and operator of light rail and monorail networks in the Australian city – to the New South Wales government.

In a statement, AIX said it would receive A$7.7 million (€6.0 million; $8.0 million) in cash “plus a distribution equal to the cash held by MTS above the working capital requirements”. Total consideration after costs is expected to be more than A$8.0 million.

AIX said the consideration “compares favourably” to an independent valuation of the assets at the end of last year. It said it intended to retain the proceeds from the deal in order to “provide enhanced funding flexibility”.

AIX has been busily divesting non-core assets in order to refocus its portfolio solely on airports. For example, last month it sold its 35 percent stake in Port of Geelong, Victoria’ s largest regional port, to RREEF Infrastructure and Asciano for A$24.9 million. After the MTS sale, AIX says airports will comprise 96 percent of its portfolio by value.

The New South Wales government intends to dismantle Sydney’s monorail network in order to build a new convention, exhibition and entertainment complex in Darling Harbour. “The monorail is not integrated with Sydney’s wider public transport network and has never been truly embraced by the community,” New South Wales Premier Barry O’Farrell told the Wall Street Journal.

AIX was advised on the MTS transaction by RBC Capital Markets, Freehills and Greenwoods & Freehills.