Brisbane toll road on the block
KordaMentha partner Martin Madden expects a deal will be done by the end of the year, pending approval from Brisbane City Council.
The 6.8 kilometre underwater stretch of toll road went bust in 2011, owing $1.3 billion to a syndicate of 24 banks.
Mr Madden said expressions of interest would close by May 13, with bids due by the middle of June. Bidders would have access to limited information but would be subject to a confidentiality agreement.
"They'll have about a month to digest that information," Mr Madden said. "Then together with [sale partners] Goldman Sachs, we'll select the bids we consider most attractive."
During phase two of the sale candidates will enter a virtual data room where they'll gain access to all information relating to the tunnel, including traffic modelling and forecasts.
Mr Madden said it was likely the firm would receive a final bid by August or September, with the council approval process set to take between one and three months.
"Interest [will] come from private financial investors and that's typically pension funds, both here and overseas, looking for long-term returns," Mr Madden said.
Although a ballpark sale figure was not available, he said recent trades on the tunnel's "thriving" debt took place at about 42¢ in the dollar.
"That should provide some indictor as to the worth," he said.
Clem7 was opened to traffic in 2010 to much fanfare, but struggled to meet traffic targets, leading to the ruin of the operators, listed RiverCity Motorway in 2011.
The firm which produced the traffic forecasts for the tunnel is now the subject of legal action brought by Maurice Blackburn on behalf of 800 RiverCity Motorway investors. The investors are hoping to recover losses of more than $150 million.
Similar circumstances preceded the collapse of Brisbane's other major toll tunnel, the $4.8 billion Airport Link, which was was placed into voluntary administration in February.
In an announcement to the ASX, the tunnel's operator, BrisConnections, said the company had decided to place the tunnel into administration, citing low traffic levels and debts worth more than the tunnel for the decision.
Work continues on a third toll tunnel for Brisbane, the $1.5 billion Legacy Way project which is due to open by next March.
Frequently Asked Questions about this Article…
Receivers are taking expressions of interest in the Clem7 tunnel after the toll road's financial collapse in 2011. KordaMentha is running the sale process and expects a deal could be done by the end of the year, subject to Brisbane City Council approval.
KordaMentha partner Martin Madden and sale partner Goldman Sachs are managing the sale. Expressions of interest were set to close by May 13, initial bids due by mid‑June, shortlisted bidders enter a virtual data room, and a final bid was likely by August or September, with council approval taking one to three months.
According to KordaMentha, interest is likely to come from private financial investors—typically pension funds—both in Australia and overseas, looking for long‑term returns.
Bidders will initially get limited information under a confidentiality agreement. In phase two, shortlisted candidates will enter a virtual data room with full access to information about the tunnel, including traffic modelling and forecasts.
Clem7 went bust in 2011 owing about $1.3 billion to a syndicate of 24 banks. The article notes recent trades on the tunnel's debt occurred at roughly 42 cents in the dollar, which the receivers said could provide an indicator of the asset's worth.
Clem7 opened in 2010 but struggled to meet traffic targets. Low traffic levels undermined revenues and contributed to the collapse of the listed operator RiverCity Motorway in 2011.
Yes. Maurice Blackburn has launched legal action against the firm that produced the tunnel's traffic forecasts on behalf of about 800 RiverCity Motorway investors, who are hoping to recover more than $150 million.
The article notes similar circumstances preceded the collapse of Brisbane's Airport Link—a $4.8 billion toll project placed into voluntary administration. Meanwhile, work continues on a third toll tunnel, the $1.5 billion Legacy Way project, which was due to open by next March.
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