Eastlink’s Owner takes on a New Debt, and Equity Changes Are Next

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Melbourne’s EastLink toll road, owned by the ConnectEast group, has recently secured $705 million in new debt funding. This financial move follows a decision made by the Australian Competition Tribunal to approve the sale of EastLink.

The funds raised through a bank syndicate of four major banks will help drive ConnectEast’s plan to restructure its capital structure to attract potential new shareholders.

RBC Capital Markets

It is understood that EastLink’s owner, ConnectEast, had RBC Capital Markets and Allens law firm line up the fresh funding in the past month, closing the deal last week. This follows the Australian Competition Tribunal’s approval of EastLink’s sale earlier this year.

Financial Review states, “The road’s expected to be worth $4 billion to $5 billion on an enterprise value basis.”

Shareholders of ConnectEast, UK pension fund USS, NZ Super, Mirae, and Dutch fund ATP, currently account for a 55% stake in the company. These stakeholders are now putting their stakes to market in light of the new debt and equity changes.

These developments come as other ConnectEast investors consider their options for the future. The restructure of EastLink’s capital structure is a positive step forward for ConnectEast Group, which has worked hard to secure fresh funding and attract potential new shareholders during these unprecedented times.

ConnectEast’s EastLink toll road is a 39 km stretch that connects Melbourne to the Mornington Peninsula.

“Mirae, CP2 and Terdot Pty Ltd also have stakes worth 5% or less,” according to ASIC filings.

Shareholders of ConnectEast

The current shareholders of ConnectEast include APG, which has a 15% stake, Korea’s National Pension Service with 15%, NZ Superannuation Fund with 9.9%, CIC with 13.8%, Teachers Insurance and Annuity Association of America with 9.9%, UK-based Universities Superannuation Scheme 19.9%, and Denmark’s ATP 12.6%.

The new debt and equity changes aim to provide ConnectEast with the capital needed to maintain its operations, meet its financial obligations, and restructure its ownership.

Whether these changes will be successful remains to be seen, but it is a positive step forward for EastLink and ConnectEast that could open up new possibilities.

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