IFM-led consortium acquires long-term leases for Port Botany and Port Kembla

By IFM - 12 April 2013

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The NSW Ports consortium, led by Industry Funds Management (IFM) and including AustralianSuper, Cbus, HESTA, HOSTPLUS and Tawreed Investments Limited, a wholly owned subsidiary of the Abu Dhabi Investment Authority, has been named by the New South Wales (NSW) Government as the successful bidder for the 99-year leases of Port Botany and Port Kembla.

The consortium partners will pay a consideration of $A5.07 billion ($US5.3 billion) to acquire the 99-year leases for the ports.

IFM CEO Brett Himbury said the transaction would benefit the Australian economy and the people of NSW, while having a positive impact on the retirement savings of millions of Australians for generations to come.

“It is a great outcome for the people of NSW and we commend the government for achieving this result,” Mr. Himbury said.

“Globally, it sets a strong precedent for using private investment to grow essential public infrastructure. Australia continues to be a leader in global infrastructure management and this is a good model for governments.”

“With over 80% ownership by Australian industry superannuation funds, the investment will benefit the superannuation savings of an estimated five million Australians – including more than 1.5 million in NSW.”

Port Botany and Port Kembla are essential infrastructure assets which serve as the primary import and export gateways to NSW, Australia’s largest economy and home to approximately one third of the nation’s population. As NSW’s only container handling facility of scale, Port Botany serves a vital role in the economy of Sydney and NSW. Port Kembla, located in Wollongong, approximately 90 kms south of Sydney, is the country’s largest vehicle import facility, and serves as a key export facility for coal and other bulk products.

Michael Hanna, Head of Infrastructure – Australia (IFM) said, “The consortium has acquired two high quality assets with considerable scope for future complementary development.

“We are delighted to assume the responsible stewardship of these marquee infrastructure assets. Together, we are fully committed to the long-term sustainable development of both ports and to maintaining strong relationships with stakeholders, including local communities, customers, employees and governmental bodies.”

Mr. Hanna said IFM was well placed to lead the consortium given its experience in global infrastructure investments and specifically in strategically important gateway assets such as ports and airports.

“The consortium members have proven track records as responsible long-term investors in infrastructure assets around the world,” he said.

“We will continue to operate the two ports according to international best practice standards and ensure they underpin the economic growth of the State.”

Working closely with the NSW Government, NSW Ports has developed a comprehensive plan to ensure a seamless transition of port operations. The transaction is expected to close on 31 May 2013.

NSW Ports was advised by UBS and Lazard as its financial advisers and Herbert Smith Freehills as its legal adviser.

About IFM
IFM is a global investment manager with investors and offices in three of the largest pension markets in the world. Headquartered in Melbourne, Australia, with offices in Sydney, London and New York, IFM manages $A44 billion ($US 46 billion) across four asset classes – infrastructure, debt, private equity, and listed equities. IFM is one of the world’s largest infrastructure fund managers and, over 18 years, has invested in a range of sectors including airports, seaports, renewable energy, toll roads and electricity generation. IFM invests on behalf of institutional investors and is owned by 30 major not-for-profit Australian pension funds.

About AustralianSuper
AustralianSuper is one of Australia's largest superannuation funds with more than two million members, including over 500,000 NSW members, over $60 billion in funds under management and a net annual cash flow of over $4 billion. AustralianSuper has been an active investor in infrastructure since 1990, with ownerships stakes in over 100 different infrastructure assets. The Fund is one of Australia's largest infrastructure investors with an approximately $5.6 billion infrastructure portfolio.

About Cbus
Cbus is one of Australia’s largest industry superannuation funds and the industry fund for the construction, building, infrastructure and allied industries. Established in 1984 Cbus provides superannuation benefits to over 700,000 members, has assets in excess of $21 billion, and accepts contributions from over 80,000 contributing employers. Cbus has $2.3 billion of investments in infrastructure and has an active strategy to invest back into the construction and building industry to not only provide strong long-term investment returns, but to also boost the economy and create jobs for its members.

About HOSTPLUS
HOSTPLUS is the national superannuation fund for the hospitality, tourism, recreation and sport industries in Australia. The Australian Hotels Association (AHA) and United Voice (formerly the Liquor Hospitality and Miscellaneous Union) jointly established the Fund in 1987. It is one of the largest super funds in Australia with 1 million members, over 80,000 employers and $12 billion in funds under management.