Brookfield Asset Management has successfully offloaded a 51 percent stake in Dalrymple Bay Coal Terminal via an initial public offering, although shares fell below the float price and have remained there since trading began this week.
Brookfield floated the business as Dalrymple Bay Infrastructure, with its listed arm Brookfield Infrastructure Partners retaining a 49 percent stake. The asset was previously owned by funds managed by BIP and co-investors either managed or advised by Brookfield.
The firm undertook a dual-track sales process for the asset starting in 2019, exploring both a private market sale via auction and an IPO. It then indefinitely delayed plans for the sale in March 2020 due to travel restrictions imposed during the pandemic, before settling on an IPO recently as the best way forward.
The float was worth approximately A$1.3 billion ($968 million; €802 million) to Brookfield and its investors. Shares were initially priced at $2.57, falling 16 percent on the day it listed to close at A$2.16, and falling again to close at A$2.13 on 10 December.
A market source told Infrastructure Investor that institutional interest had been limited because of concerns over buying into an asset directly linked to fossil fuels, as well as its reliance on exports to China. But retail investors bought almost a third of the shares on offer, attracted by a potential 7 percent dividend yield.
The Queensland government also purchased an approximate 10 percent stake, to be managed by QIC.
The Dalrymple Bay Coal Terminal is regulated by the Queensland Competition Authority and handles coal from more than 30 mines in the state’s Bowen Basin. It is one of the largest coal export terminals in the world, with capacity to export more than 85 million tonnes per year and is the largest metallurgical coal facility in the world.
It is operated by Brookfield under a 50-year lease from the Queensland government, with an option to extend for a further 49 years.