Road warriors

21 Jul 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.

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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.

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

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