Toll road operator Transurban Group may be setting the table for its outright acquisition of the Cross City Tunnel (CCT) by way of a debt purchase in the faltering public-private partnership (PPP; P3).
Transurban has paid The Royal Bank of Scotland (RBS) A$475 million for the project's senior secured debt. RBS is the lone senior secured creditor.
The newly gained exposure to the mile-long east-west CCT gave credence to a claim by Transurban chief executive Scott Charlton that his company wanted to buy the Sydney, Australia-based tunnel for A$500 million.
Charlton announced that Transurban, the sole debt holder in the tunnel, was positioned to “unlock value”.
CCT would fit with the Sydney-area toll road portfolio Transurban has built. The company is also owner of the M2, M5 and M7 as well as the Eastern Distributor and Lane Cove Tunnel.
The Cross City Tunnel was placed in receivership last month for the second time. In 2006, the transportation asset was A$500 million in debt. ABN AMRO bought the tunnel for A$700 million in 2007.
CCT is the first tunnel in Sydney to require drivers to have an electronic tolling tag installed in their automobiles.
Fitch Ratings issued a report calling CCT a “logical addition“ for Transurban.