IFM-Led Group Leases Botany, Kembla Ports for A$5.07 Billion

A group led by Industry Funds Management and including a unit of Abu Dhabi Investment Authority will pay A$5.07 ($5.35 billion) to lease two Australian ports, as New South Wales state works to plug a budget deficit and raise funds for infrastructure projects.

The successful bidders will hold 99-year leases at Port Botany in southern Sydney and Port Kembla in Wollongong, a city south of the state capital that is home to Australia’s largest steel mill, state Treasurer Mike Baird told reporters.

New South Wales, home to about a third of Australia’s almost 23 million people, is selling the port leases to raise funds for infrastructure projects, Baird said in June. The ports, combined with the divestment of a desalination plant in May, may bring in about A$4 billion for the state’s Restart NSW infrastructure fund, Baird has said.

‘It’s an incredible vote of confidence and an endorsement in the health and future of New South Wales,’’ Baird said in Sydney today. The state treasurer forecast in December a budget deficit of A$776 million for the year ending June 30.

The succesful bidding group, known as NSW Ports consortium, includes AustralianSuper, Cbus, HESTA, HOSTPLUS and Tawreed Investments Ltd., the unit of Abu Dhabi Investment.

Port Botany is the nation’s second-biggest container port after Melbourne and sits on Botany Bay. The Port Kembla terminal is about 72 kilometers (45 miles) south of Sydney and is the conduit for coal transported from mines in the south and west of the state, according to its website.

A group led by Hastings Funds Management Ltd. and including Borealis Infrastructure Management Inc. and Ontario Teachers’ Pension Plan considered a bid for the 99-year leases, people with knowledge of the matter said in October. Ontario Teachers’ last month bought 70 percent of Leighton Holdings Ltd. (LEI)’s telecommunications assets for about A$620 million.

To contact the reporter on this story: David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story: Anjali Cordeiro at acordeiro2@bloomberg.net

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