Road warriors

21 July 2015 By Kevin Allison

Macquarie and Ferrovial are shopping the fee-charging U.S. turnpike, a decade after buying it for $1.8 bln. The high debt and low earnings mean it’ll take a big valuation multiple to recoup the investment. Recent infrastructure deals suggest they could get one.

This content is for Subscribers only

Subjects

Regions

Context News

Spanish infrastructure group Ferrovial and Australia’s Macquarie have put their concession in the Chicago Skyway toll road up for sale, a person with knowledge of the matter told Reuters on June 26.

Ferrovial owns a 55 percent stake in the concession, while Macquarie owns the remaining 45 percent. The partners paid $1.8 billion in 2005 for the right to operate the 7.8-mile highway connecting the south side of Chicago and the state of Indiana for 99 years.

The Skyway generated $71 million of earnings before interest, tax, depreciation and amortization in 2014. Its financial statements show roughly $1.6 billion of net debt. Net liabilities are approximately $2.4 billion, including the cost of terminating various underwater interest-rate swaps.

In March, Australia’s IFM Investors paid $5.7 billion – or about 32 times the previous year’s EBITDA – to buy the bankrupt operator of the nearby 157-mile Indiana Toll Road. Macquarie and Cintra had paid $3.8 billion to secure a 75-year lease on the concession in 2006.

News of the Chicago Skyway sale was first published by the InfraNews website.

Email a friend

Please complete the form below.

Required fields *