Australia's Victoria State to Sell Port of Melbourne

By MarEx 2014-08-13 09:34:00

Australia's Victoria state said on Wednesday it has hired Morgan Stanley to sell the lease for the Port of Melbourne, the country's largest container and general cargo port, in a deal local media estimated may fetch A$6 billion ($5.57 billion).

The country's governments are hoping to raise some A$130 billion by selling state-owned infrastructure in the next two years and Victoria, Australia's second-most populous state, hopes to raise A$27 billion by selling assets.

In May, Morgan Stanley sold New South Wales state's Port of Newcastle, the world's largest coal export terminal, to China's China Merchants and locally based Hastings Funds Management for A$1.75 billion, double the amount widely expected.

Hiring Morgan Stanley was "an important step in securing the best value for Victorians through a medium-term lease of the Port of Melbourne," state treasurer Michael O'Brien said in a statement without specifying how long the lease will be.

"It is absolutely critical that we receive the best quality commercial advice when considering a lease of this size and scale."

The state also hired corporate adviser Flagstaff Partners and law firm Minter Ellison to manage the deal. The advisers will conduct project management, due diligence, valuation and asset preparation for the sale, the statement said without giving a target valuation for the asset.

The sale process will start in 2015, it added.

Last year, NSW sold Port Botany and Port Kembla for A$5 billion. The Queensland state government has said it hopes to sell its Townsville and Gladstone ports if it wins an election in 2015.

(1 US dollar = 1.0775 Australian dollar)

Copyright Reuters 2014.