Government-owned QIC today announced its intention to conduct a trade sale via auction for its investment in Queensland Motorways.
Under the process, QIC will start calling for indicative bids for 100 per cent of the equity by the end of the year, with preliminary offers expected to be due by the end of January. Shortlisted contenders will then be asked to submit binding bids, with a contractual close targeted for April 2014. Final timeline for the process will be announced to prospective bidders by the end of the year.
Damien Frawley, QIC’s chief executive, said the decision followed consultation with potential domestic and international investors. The firm had also considered an exit via IPO as well as a flexible trade sale where investors would be able to bid for part of the business.
“Due to the significant amount of interest for 100 per cent ownership of what is a premium infrastructure asset, QIC has determined that conducting a traditional auction process is in the best interests of maximising the return to Queensland’s Defined Benefit Fund, which holds the Queensland Motorways investment,” Frawley said in a statement.
The government transferred Queensland Motorways to QIC in May 2011, for a market-value price of $3.088 billion. The firm claims the business has been significantly turned around since then.
Queensland Motorways just reached contractual agreement to acquire the tolling rights for three additional Brisbane roads, comprising Legacy Way, the Go Between Bridge and the CLEM7 tunnel. The CLEM7 deal, also announced today, will see Queensland Motorways pay $618 million to RiverCity Motorway for the 6.8km tolled motorway passes.
Queensland Motorways is held by QIC on behalf of the state’s Defined Benefits Fund, which funds its superannuation obligations to retiring members. The proceeds of a potential sale would remain in the fund.