Transurban will Not Buy Further Stakes in Westlink M7

Submitted by Share Trading on 14 January, 2009 - 08:31

Transurban Group (TCL) has announced that it will not exercise its right to acquire Macquarie Infrastructure Group's (MIG) 50% stake in the Westlink M7 toll road. The company said acquiring additional stake in the toll road would not give further value to its shareholders.In Last December, MIG said, that it is going to sell the 50% stakes in Westlink M7 to Western Sydney Road group (WSRG) for $805 million.

Chris Lynch, CEO of Transurban Group said the company was happy to hold a 50% stake in that asset alongside Macquarie Infrastructure Group and its partner in the WSRG. "However, any acquisition of additional equity in the Westlink M7 at the price created by the formation of WSRG would not have been value creative for Transurban security holders given the funding options in this current market" he revealed. Meanwhile, Transurban said toll revenue from CityLink in Melbourne rose 8% from a year earlier to $94.2 million.

MIG said today it would update the market on completion of the sale to WSRG, which was expected by the end of the first quarter 2009, and would continue discussions with third parties regarding a sale of its interest in WSRG. The company also said its Sydney toll roads were performing well. Revenue for the quarter from its Hills M2 was up 4.3% to $31.8 million, on the M7 it rose by 8.1% to $40.2 million while at the Eastern Distributor revenue climbed 8.7% to $20 million.

A TCL spokesman said, "There will potentially be significant operating synergies between them". MIG said average daily traffic on its M6 Toll in Birmingham, UK fell 11.5% from a year ago, while average daily revenue was down just 0.3%. On its 30%-owned 407 ETR outside Toronto, Canada, MIG said vehicle kilometers travelled were down 3.4% on-year, impacted by slowing economic activity across North America and 45% higher snowfall than a year ago.