South Australian port raising A$45m ahead of potential 2023 IPO

The Lucky Bay shallow-water port, operational since mid-2020, could list in late 2023 following a capital raise to fund expansion and repay construction debt.

ICAM Duxton Port Infrastructure Trust, an investment trust managed by Inheritance Capital Asset Management, is seeking to raise up to A$45 million ($34 million; €29 million) from investors ahead of a potential public listing.

The vehicle, which owns 100 percent of the Lucky Bay shallow-water port on South Australia’s Eyre Peninsula, wants to raise the capital mostly to repay greenfield development debt incurred for the construction of the port, ICAM head of infrastructure Antonio Calabrese told Infrastructure Investor.

The money will also be used for working capital requirements and allocated to funding an expansion project on Kangaroo Island, after T-Ports, the entity owned by IDPIT that operates Lucky Bay, reached an agreement with Mitsui Bussan Woodchip Oceania, Kangaroo Island Plantation Timbers and HarvestCo to trans-ship timber from plantations affected by the bushfires of 2019-20.

IDPIT told investors it is targeting a 20 percent IRR and 8 percent average annual cash yield by 2022. Duxton Asset Management and shipping company Sea Transport Solutions are major shareholders in the trust.

The raise is being carried out by Morgan Stanley Wealth Management and is targeting institutional investors, high-net-worth individuals and family offices.

Calabrese said the firm is targeting an initial public offering for the trust in late 2023, subject to market conditions.

IDPIT first secured seed equity and debt financing in early 2018 to get the project off the ground and started construction later that year with first harvest operations starting in 2019.

The port uses a shallow-water trans-shipment vessel, loading ships at the shoreline before transferring their contents to deep-water vessels outside the bay. It has capacity to store 360,000 tonnes of grain in 10 bunkers, with further storage inland. The trans-shipment vessel Lucky Eyre has a nameplate capacity to load 13,800 tonnes of grain per day.

ICAM has also launched another port investment vehicle, the ICAM ACIF Wallaroo Trust, which is developing another shallow-water trans-shipment port in Wallaroo, South Australia.