Macquarie drives away with ConnectEast tollway

Macquarie Bank has won the right to help finance and manage the successful bid by ConnectEast to build and operate the Scoresby tollway in Melbourne’s eastern suburbs under a 35 year concession. In addition to Macquarie, ConnectEast includes two Leighton subsidiaries, Thiess and John Holland, both of whom will share the construction work over the next four years. The tollway is due to open in late 2008.

The equity component of the funding includes the sale of $1.12 billion in shares through an initial public offering underwritten by ABN AMRO Rothschild, Commonwealth Bank and Macquarie Bank. Of the $1.12 billion, investors must pay $616 million in the first instalment (before Christmas) and then $504 million final instalment late next year.

The sponsors have already allocated between 70 per cent and 80 per cent of the equity in the IPO, but refused to say what the exact percentage was, and would not identify the institutional investors that agreed months ago to support the ConnectEast bid. The sponsors say the equity investment will pay a guaranteed yield of 6.5 per cent (at the subscription price) for five years from March 2005 to March 2010. The offer is set to run from October 22 to November 4.