The Southern Way Consortium (“Southern Way”), co-sponsored and advised by the Royal Bank of Scotland (“RBS”), reached financial close today for the A$759 million Peninsula Link Project (“Peninsula Link”).
Southern Way brings together the expertise of leading infrastructure providers including RBS (Sponsor and Financial Adviser), Abigroup (Sponsor and Design and Construction Contractor), and Bilfinger Berger Services (Operations and Maintenance).
The toll-free Peninsula Link roadway, a 27 kilometre road link between EastLink in Carrum Downs and the Mornington Peninsula Freeway in Mount Martha, is to be delivered under the Availability Public Private Partnership model. Peninsula Link is expected to create thousands of jobs and significantly improve travel times through Frankston and the Mornington Peninsula. It is expected to be completed and open to motorists in early 2013.
The fully underwritten debt and equity package was assembled by RBS. The bank club comprises Australia and New Zealand Banking Group Limited (ANZ), National Australia Bank Limited (NAB), The Royal Bank of Scotland plc (RBS), Banco Bilbao Vizcaya Argentaria S.A. (BBVA), Banco Santander S.A., Bank of Ireland Group, Sumitomo Mitsui Banking Corporation (SMBC), The Bank of Tokyo-Mitsubishi UFJ Ltd (BoTM) and WestLB AG (WestLB).
One-third of the equity requirement for the project has been provided by Bilfinger Berger Project Investments, who will also manage the project. The remainder of the equity has been provided by Australian superannuation funds advised by Access Capital Advisers, including Prime Super, a Victorian based fund.
RBS’s Head of Infrastructure Advisory, Geoff Daley, commented “We were delighted with the outcome on the financing on the Peninsula Link Project, with a fully underwritten bid provided to the State of Victoria in late 2009, and now implemented with financial close less than a month after appointment as preferred bidder. Importantly, RBS arranged a financing package for Southern Way which had no reliance on State support for either syndication after financial close, nor refinancings into the future. In the midst of the global financial crisis, the State provided support for the financing of the desalination project that was necessary at that time. Now, only 6 months later, we’ve delivered to the State a risk allocation on financing which has assisted the government to move the PPP market away from reliance on such support.”
Iwan Tirta, RBS Director, Infrastructure Advisory, RBS and the project director for Southern Way, said “The delivery of this PPP has been very efficient, with financial close achieved less than 11 months after the release of the Expression of Interest. This reflects the experience and hard work of the Linking Melbourne Authority working with the consortium partners and it’s a tribute to everyone involved. The success of Southern Way in reaching financial close so quickly underlines the strength of RBS’s team together with the best from our extensive consultant team and our delivery partners at Abigroup Contractors and Bilfinger Berger Services.”