Overseas investment funds InfraRed, John Laing and Morrison & Co have been shortlisted for the sale of Royal Bank of Scotland’s public private partnership, Axiom Education Victoria.
Rothschild is running the sales process for RBS, which is trying to offload the remainder of its bad bank assets as it pares operations to its key UK lending business.
The $255 million Axiom partnership was formed in 2008 to build, maintain and manage 12 schools in Victoria. The schools portfolio offers stable yields at a time when interest rates are at record lows, with the government repaying costs in quarterly instalments.
One industry source said the Axiom PPP would be unlikely to fetch more than $220 million. Issues around the debt and swaps used as part of the initial raising were likely to drag the price lower.
The UK’s InfraRed Capital Partners, which was spun out of HSBC, and UK fund manager John Laing, which focuses on infrastructure and real estate, are both listed on the London Stock Exchange.
New Zealand-based infrastructure investor Morrison & Co has made no secret of its plans to invest at least heavily in health, education and transport across the Australian PPP market.
AMP also expressed interest in Axiom, but it is not known whether it has been shortlisted.
The parties are hoping to wrap up a deal before Christmas. But if a deal isn’t reached, RBS would likely keep Axiom as part of its bad bank. RBS is 81 per cent-owned by the UK government.