Aus & NZ: CIMIC joined by equity investor for WestConnex bid

01 June 2018 - 12:00 am UTC

CIMIC is forming a bid group for 51% of the Sydney Motorway Consortium building Sydney’s WestConnex motorway, Inframation understands.

Adviser and investor sources say it is unusual to have bid groups still forming at this late stage, with final bids understood to be due by late July. But a combination of factors is seeing late changes.

Local media reports earlier this week said the Netflow consortium of Plenary and Cintra, may be having trouble retaining investors.  

A spokesperson for the Netflow consortium declined to comment.

Plenary shareholder CDPQ has been identified with the Netflow consortium, as have AIMCo, Borealis Infrastructure, PSP Investments and Partners Group.

But sources familiar with the matter said Partners Group pulled out some time ago.

One source with knowledge of the matter and another familiar said CIMIC had signed up at least one equity investor this week and more are set to join.

A spokesperson for CIMIC declined to comment on this or whether it is bidding.

Some funds have told Inframation they had been approached by Netflow, but had baulked at the fees they were expecting.

Another factor in the mix is the federal government’s looming changes placing limits on several tax exemptions for offshore funds, with the first of these due to take affect from July.

There are mixed views on the impact of the changes. They may just limit the price investors are willing to pay for projects although much will depend on how much the economics of bid commitments relies on the existing exemptions.

The government has said some “new, government-approved, nationally significant infrastructure assets” will be exempted from complying with the new rules for 15 years.

According to an infrastructure tax expert WestConnex falls within the exemption category, based on the exposure draft of the legislation. Another source close to the process agreed that WestConnex is likely to be exempt.

Also expected to lodge final bids for WestConnex are IFM Investors as well as Sydney Transport Partners, which is led by Transurban and includes CPPIB and Tawreed Investments.

CIMIC