Timely exit for Hastings to sell $1.2bn US gas terminal

Hastings has capitalised on a market hungry for LNG assets to build a war chest for infrastructure assets in Australia.

Hastings Funds Management offloading of its 25 per cent stake in a Texas liquefied gas (LNG) terminal to a hungry market will give it a sizeable war chest for infrastructure investments in Australia and overseas.

 “As an active asset manager, it was timely for Hastings to monetise the investment given strong market demand for assets exposed to the LNG value chain… We are long-term investors but we do not ignore the market and will move to maximise value,” said Hastings executive director of global investment Peter Taylor in a statement.

Hastings is selling the stake to New York-based Global Infrastructure Partners for $US1.1 billion ($1.17bn), achieving a multiple of 5.5 times gross return on the initial investment made in 2010.

The firm will continue to assess opportunities in North America that fit with its portfolio, said Hastings CEO Andrew Day.

Hastings is pursuing a very aggressive strategy to grow its global presence, including in the US market, and it is increasingly managing money coming out of Asia looking for investment in developed countries, a source close to the firm told Data Room.

That also suggests Hastings will have enough firepower to contest for the upcoming sales of government-owned infrastructure assets in Australia.

Just recently Hastings won the auction for the Port of Newcastle, teaming up with China Merchants Group in a $1.75bn deal. However, it lost the contest earlier for Queensland Motorways, which was sold to a Transurban-led consortium for $7.06bn. It was also an under-bidder in the sale of the Port of Botany to Industry Funds Management.

Hastings will probably team up with other investors to bid for electricity assets in New South Wales and Queensland, another source familiar with the sector told Data Room.

The NSW government has appointed UBS and Deutsche Bank to conduct scoping studies for the sale of 49 per cent of the poles and wires assets, while Queensland is looking to sell $33.6bn of electricity assets if the current government wins next year’s election.

 (Reporting by maggie.lu@businessspectator.com.au)