The field for the $1.2bn-plus Geelong Port is believed to be narrowing as some funds shy away from bidding for the assets due to concerns about the level of crude oil and liquefied national gas it handles.

Geelong Port handles over 600 vessel visits annually, with the majority of the shipping linked to the bulk liquid berth at Refinery Pier.

It means that some superannuation funds that typically invest in infrastructure are side-stepping the sales process due to their commitments to focus on more environmentally friendly assets.

The port, based at Corio Bay in Victoria, is the country’s sixth largest port based on tonnage.

The major commodities it handles include crude oil and petroleum products from Viva Energy’s Geelong refinery at Corio Bay, export grain and woodchips, alumina imports and fertiliser.

Still, it seems that the port has attracted enough interest for a sale of the asset after an earlier possibility where only the 50 per cent interest owned by Brookfield was on offer.

The remainder is owned by State Super, which is selling its interest through Macquarie Capital. Brookfield is advised by Barrenjoey Capital Partners.

The sale process is in the second phase, with at least two groups already offering an expression of interest, and the target for the owners is for the port to be sold by Christmas.

Geelong Port generates $60m of annual earnings before interest, tax, depreciation and amortisation and the hope of the owners is that it will sell for between 20 and 30 times ebitda as interest rates remain low and demand to invest in infrastructure assets is strong.

So far, suitors include Stonepeak Infrastructure Partners, which is bidding with Palisade Investment Partners, while AMP Capital is thought to be taking a look.

linders Port is considered a likely starter but the unknown is the Port of Melbourne.

Should it opt to compete and clear Australian Competition and Consumer Commission hurdles, it will be hard to beat.

Its owners include Queensland Investment Corp, The Future Fund and Global Infrastructure Partners.

Flinders Port in South Australia is owned by Equipsuper, Spirit Super, State Super, Statewide Super and Infrastructure Capital Group.

The remaining 50 per cent shareholding of Port of Portland, a deep water located between Melbourne and Adelaide, was purchased by Palisade in 2018 from the Utilities Trust of Australia in 2018. At that time, the price paid for the interest equated to about 11 times ebitda.

Extracted in full from: Super funds shy away from Geelong Port offer (theaustralian.com.au)

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