Shares in toll road operator and transport infrastructure business Transurban Group (ASX: TCL) are in a trading halt this morning as the group seeks to raise cash to help pay for the $5.5 billion West Gate Tunnel Project in Melbourne.
Due for completion in 2022 the tunnel is designed to help alleviate traffic around greater Melbourne's congested roads and freeways by reducing reliance on the West Gate Bridge and providing additional access to the Port of Melbourne.
Transurban's $4 billion contribution to the project will be funded via a mixture of new equity, syndicated bank debt lending, and debt issuance collateralised against future West Gate Tunnel toll payments.
The remaining $1.5 billion will be donated by the taxpayer for a project that is expected to create 6,000 jobs over the next 5 years.
Transurban is asking current shareholders to buy more shares at $11.40, which represents a 5% discount to the last closing price of $12 a share.
Guidance for the FY 2018 distribution of 56 cents per share remains unchanged, with 28 cents per share to be handed out for the six-month period ending December 31 2017. Scrip allocated under the capital raising will not be eligible for the interim dividend.
UBS, JP Morgan and Macquarie Group Ltd (ASX: MQG) are reported to be helping Transurban with the cash call.