China Merchants, Hastings, Lease Australian Coal Port

Posted by George Backwell
Wednesday, April 30, 2014
Image courtesy of Port of Newcastle

Hastings Funds Management and China Merchants Group have won a state government auction for a 98-year lease on Australia's Port of Newcastle, the world's biggest coal export terminal, paying a higher-than-expected A$1.75 billion ($1.6 billion).

An initial New South Wales state budget plan had valued the lease on the port terminal at A$700 million, but fierce competition for Australian infrastructure assets coming on to market has seen a steady rise in multiples paid.

The winning bid for Newcastle port came in at 27 times earnings, matching the 27 times earnings Transurban Group, Australia's biggest toll road owner, paid last week for a Queensland state toll road firm.

That compares with multiples of 25 times earnings in a A$5.07 billion deal for 99-year leases for Port Botany and Port Kembla that was won by Industry Funds Management last year.

Local media have reported that other bidders for Newcastle port included Hong Kong-listed Cheung Kong Infrastructure , a consortium of New York-based Global Infrastructure Partners and Deutsche Asset & Wealth management, Macquarie and its partner China Construction, as well as a one from ATEC Rail Group and fund manager TIAA-CREFF.

"It was an incredibly competitive field," State premier Mike Baird told a news conference.

Hastings, an Australian firm with A$7.4 billion in funds under management, and state-backed China Merchants were equal partners in the bid, according to a statement from the Premier's office.

Hastings has a portfolio of utilities, airports, toll roads and ports in Australia, Britain, Europe and the United States. It was a partner in winning bids for a Sydney desalination plant last year and Cairns and Mackay Airports in 2008.

China Merchants, which owns a wide range of transportation, finance and property assets, had A$819 billion assets under management as of end-December.

A record 142.64 million tonnes of coal was exported in 2012/13 from Port of Newcastle, up 17 percent from a year earlier, according to its annual report.

At end-June 2013, the port had a net profit of nearly A$23 million and net cash flow from operating activities of A$27 million.

Infrastructure assets such as toll roads, power stations and ports are in hot demand from investors for their stable, long-run returns and tough barriers to competition.

Australia's state governments, once hesitant to give up tax revenue by selling infrastructure, have had a change of heart since New South Wales sold its desalination plant for $2.3 billion in 2012.

The federal government said last month it would pay states to sell assets as treasurers across jurisdictions agreed to do more to lure local and overseas investors to take a slice of an estimated A$100 billion in infrastructure.

The proceeds from the sale of Newcastle port will be invested to build infrastructure in the state with 30 percent directed towards projects in rural and regional areas. 

(By Swati Pandey; additional reporting by Jane Wardell; editing by Edwina Gibbs)
 

 


People & Company News

Rickmers Holding, E.R. Capital Drop Merger Plan

Rickmers Holding AG and E.R. Capital Holding have jointly decided not to pursue the merger of their ship management activities.   For many years the companies

MN100: Conrad Shipyard

The Company: Conrad Shipyard was established in 1948 and is headquartered in Morgan City, Louisiana. The company designs, builds and overhauls tugboats, ferries,

Why Maritime Museums Matter

With today’s focus on digital technology, mobile apps, enhanced reality and the overall digital landscape, the maritime industry often gets overshadowed, leaving some to ask,

Contracts

C-Job Designs Flettner Freighter for Switijnk

The Dutch shipping company family Switijnk has contracted C-Job Naval Architects to develop a Rotor Sail-equipped design to meet their specific loading and sailing profile.

Yangzijiang Shipbuilding to Slash 2,000 More Jobs

Chinese shipbuilder Yangzijiang Shipbuilding Holdings Ltd said it plans to cut 2,000 additional jobs, just under 10 percent of its current workforce, stepping up

Australia Warns DCNS after Security Breach

Australian defence officials warned French naval contractor DCNS to beef up security in Australia, where it is preparing to build a A$50 billion ($38.13 billion) fleet of submarines,

Ports

Vitol's Malaysia Terminal Suspends Ops after Spill

VTTI, the storage unit of world's largest oil trader Vitol, has suspended operations at its terminal in southern Malaysia following an oil spill, two industry sources said on Friday.

Shenzhen Port to Adopt China ECA Regulation

China's Shenzhen port is set to to adopt requirements for ships at berth requiring to burn marine fuel with sulfur content not exceeding 0.5 percent starting October this year,

Cochin Port Gets a Little 'Breathing Space'

The Cabinet Committee on Economic Affairs of India, chaired by the Prime Minister Narendra Modi, has given its approval for waiver of penal interest on Government

Finance

Rickmers Holding, E.R. Capital Drop Merger Plan

Rickmers Holding AG and E.R. Capital Holding have jointly decided not to pursue the merger of their ship management activities.   For many years the companies

Yangzijiang Shipbuilding to Slash 2,000 More Jobs

Chinese shipbuilder Yangzijiang Shipbuilding Holdings Ltd said it plans to cut 2,000 additional jobs, just under 10 percent of its current workforce, stepping up

Australia Warns DCNS after Security Breach

Australian defence officials warned French naval contractor DCNS to beef up security in Australia, where it is preparing to build a A$50 billion ($38.13 billion) fleet of submarines,

 
 
Maritime Careers / Shipboard Positions Maritime Standards Naval Architecture Pipelines Pod Propulsion Port Authority Salvage Ship Electronics Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1539 sec (6 req/sec)