New South Wales Seeks Buyer for WestConnex Toll Road

By Robb M. Stewart Features Dow Jones Newswires

MELBOURNE, Australia--The government of Australia's New South Wales state is seeking bidders for a controlling stake in the company building a major highway around Sydney to raise funds to help complete the final stage of the project.

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The government on Friday confirmed it would push ahead with a sale of an at least 51% stake in Sydney Motorway Corp., the company behind the WestConnex toll road.

It is the latest move by an Australian government to sell infrastructure assets around the country to pay for the construction of roads, rail lines, hospitals, schools and other developments. On Thursday, New South Wales agreed to sell control of one of the state's largest power grids for 7.62 billion Australian dollars (US$5.62 billion).

The government said it will test interest from suitors in the WestConnex sale later this year, and was targeting a closing date for a transaction in mid-2018.

The decision came as Premier Gladys Berejiklian released the concept design for the final stage of the highway, an underground western bypass of Sydney's business district, with links to the areas around the port and airport. Building is expected to begin next year and finish in 2023.

Analysts, speculating the government might look to offload WestConnex, have suggested Australian toll-road operator Transurban Group (TCL.AU) might look to buy the highway to protect its market position and prevent a rival from establishing a foothold in Sydney. UBS has estimated a 51% equity stake in WestConnex could be worth between A$2 billion and A$4 billion, depending on business scenarios.

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On Thursday, the state government selected a consortium led by investment bank and asset manager Macquarie Group Ltd. (MQG.AU) to buy a slightly more than 50% stake in a lease over Endeavour Energy, which runs a big electricity-distribution network. That wrapped up a A$20 billion "poles and wires" program to sell leases to its electricity infrastructure to invest in new infrastructure projects.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

May 12, 2017 01:45 ET (05:45 GMT)