After paying $7 billion for the vast bulk of Brisbane's tollway network last year, the Transurban consortium was best placed to grab the final piece of the jigsaw, Brisbane's AirportlinkM7 tunnel and tollway. They have done just that, bringing the curtain down on an era that cost banks and investors billions in the process.
Savings from combining the Brisbane tollroads that only Transurban and its partners could rely on helped justify a $1.87 billion purchase price and a $2 billion total outlay including stamp duty that is just 54 per cent of Airportlink's original $3.7 billion construction cost.
The company that owned the tollway, BrisConnections, had a stonking $3.1 billion of debt on its balance sheet when it was floated on the ASX by Macquarie in 2008 for $1.2 billion, payable in three equal instalments.
BrisConnections floated with predictions that 95,000 vehicles a day would be using its tollway by 2012, rising to 120,00 vehicles a day by 2026. Just under 51,000 vehicles a day used Airportlink in the latest year to June.
It's a candidate for the title of worst float in ASX history. Investors who paid a first instalment of $1 with $2 to come in 2008 did all of their dough: their float shares fell 60 per cent on their first day of trading, and were worthless within months.
Lenders put the group into receivership early in 2013, and the price Transurban's consortium is paying puts the total loss on a debt load that has compounded to $3.9 billion at almost 52 cents in the dollar.
Actual losses depend on when the debt was acquired, and at what price. About a third of the exposure is with original bank lenders. Another third was sold to Macquarie at a discount around the time BrisConnections went into receivership. Hedge funds have bought the rest at firesale prices.
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Savings from combining the Brisbane tollroads that only Transurban and its partners could rely on helped justify a $1.87 billion purchase price and a $2 billion total outlay including stamp duty that is just 54 per cent of Airportlink's original $3.7 billion construction cost.
The company that owned the tollway, BrisConnections, had a stonking $3.1 billion of debt on its balance sheet when it was floated on the ASX by Macquarie in 2008 for $1.2 billion, payable in three equal instalments.
BrisConnections floated with predictions that 95,000 vehicles a day would be using its tollway by 2012, rising to 120,00 vehicles a day by 2026. Just under 51,000 vehicles a day used Airportlink in the latest year to June.
It's a candidate for the title of worst float in ASX history. Investors who paid a first instalment of $1 with $2 to come in 2008 did all of their dough: their float shares fell 60 per cent on their first day of trading, and were worthless within months.
Lenders put the group into receivership early in 2013, and the price Transurban's consortium is paying puts the total loss on a debt load that has compounded to $3.9 billion at almost 52 cents in the dollar.
Actual losses depend on when the debt was acquired, and at what price. About a third of the exposure is with original bank lenders. Another third was sold to Macquarie at a discount around the time BrisConnections went into receivership. Hedge funds have bought the rest at firesale prices.
SMH More
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