🔮 Better than the Oracle? Our Fair Value found this +42% bagger 5 months before Buffett bought itRead More

Creditors launch $2.8 bln M6toll motorway sale -sources

Published 28/04/2016, 01:43 am
© Reuters.  Creditors launch $2.8 bln M6toll motorway sale -sources
CBKG
-
CAGR
-
SGEF
-
ABE
-
MQG
-
ATL
-
ALX
-
UBSG
-

By Sophie Sassard and Freya Berry

LONDON, April 27 (Reuters) - Creditors of Britain's first pay-as-you-go motorway have launched the sale of the toll road, seeking to recoup debt of about 1.9 billion pounds ($2.77 billion), three sources close to the process said on Wednesday.

The M6toll was opened in 2003 to ease congestion on the non-tolled M6 motorway but has struggled to service heavy debt piled on by Australia's Macquarie MQG.AX after its initial investment in the operation. That prompted a restructuring of M6toll in 2013, effectively handing control to its creditors.

UBS UBSG.S , acting as adviser on the proposed sale, has sent marketing information to potential buyers and expects first-round bids in May, the sources said.

Spanish toll road operator Abertis ABE.MC , France's Vinci SGEF.PA and Italy's Atlantia ATL.MI are seen as potential suitors, they added.

The 43 km M6toll is operated by Midland Expressway, which is owned by Macquarie Atlas Roads MQA.AX , through a concession that runs until 2054.

In addition to the 1.9 billion pounds of debt, M6toll has a 180 million pound liability to the government's Land Fund for use of the West Midlands land covered by the motorway. This would have to be paid off by a new owner or rolled over into new debt. M6toll generated core earnings (EBITDA) of 72.8 million pounds last year, up from 62.9 million pounds in 2014.

M6toll declined to comment while a UBS spokeswoman was not immediately available for comment.

Vinci also declined to comment and representatives of Abertis and Atlantia were not immediately available.

Infrastructure funds are also expected to show interest in the sale, though one of the sources said that it could prove difficult to make the numbers work because the presence of a free alternative roads means that tolls cannot be raised easily.

Two of the sources also voiced doubt over the likelihood of the sale recovering the full 1.9 billion pounds owned to lenders, including Germany's Commerzbank CBKG.DE , French bank Credit Agricole CAGR.PA and Portugal's Novo Banco. ($1 = 0.6849 pounds)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.