Hastings Funds Management and a Chinese corporation, China Merchants, have won the auction for Port of Newcastle, paying a hefty $1.75 billion to secure a 98-year lease on the port.
“This momentous result exceeds all expectations,” said NSW Premier Mike Baird.
The NSW Government expected to reap around $1 billion for the port, and the final price of $1.75 billion, which represents a multiple of 27 times earnings, underscores continued strong demand for infrastructure assets.
Hastings and China Merchants, which owns Australian logistics group Loscam, were “equal partners” in the investment, the government said.
Some $340 million from the sale proceeds will be invested into Newcastle’s central business district, while the remaining $1.5 billion will be invested in NSW infrastructure.
As first reported by The Australian Financial Review’s Street Talk on Monday, Hastings was one of five bidders believed to be preparing offers ahead of this week’s deadline.
The port of Newcastle is the world’s largest coal terminal and forecasting $69 million earnings before interest, tax, depreciation and amortisation in the 2013-14 financial year.
The port sale comes only twelve months after Baird agreed to the $5.1 billion privatisation of NSW’s two other ports at Botany and Kembla and follows a five-month bidding process
This story Administrator ready to work first appeared on Nanjing Night Net.