Why the Transurban (ASX: TCL) share price is sliding on Wednesday

Transurban has completed a $3.97 billion capital raise.

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The Transurban Group (ASX: TCL) share price is falling this morning following news the company has completed the final stage of its $3.97 billion entitlement offer.

The resulting funds will go towards the purchase of the remaining 49% of Sydney’s WestConnex. Transurban already has a 50% hold in the road network.

Transurban is part of a consortium – named Sydney Transport Partners (STP) – that’s buying the stake in the major road infrastructure from the NSW Government. The acquisition will cost the consortium $11.1 billion.

At the time of writing, the Transurban share price is $13.45, 0.81% lower than its previous close.

Let’s take a closer look at Transurban’s latest equity raise and its bolstered stake in WestConnex.

Transurban share price slips on finished capital raise

The Transurban share price is sliding lower this morning after the company announced it has completed its $3.97 billion entitlement offer.

The now-completed offer finished alongside its retail bookbuild, part of a retail entitlement offer that raised around $1.07 billion.

The company previously completed a $2.9 billion institutional entitlement offer.  

Under the retail entitlement offer, eligible shareholders could get their hands on Transurban shares for $13 apiece. Shareholders were able to purchase 1 new Transurban share for every 9 shares they owned as of 23 September.

The retail bookbuild saw around 28.6 million new Transurban shares sold for $13.30 each. The extra 30 cents will go to retail shareholders who didn’t act on the pro-rata offer or who were ineligible.

Transurban is also raising $250 million through selling shares for $13.07 apiece to AustralianSuper, a fellow member of the STP Consortium.

That brings the total amount raised by Transurban to $4.22 billion, as Transurban announced on 20 September. The Transurban share price was frozen as the company prepared to announce the capital raise. It fell 0.4% when trading resumed.

WestConnex will be a roughly 70-kilometre network connecting Sydney’s west with the city’s CBD, airport, and Port Botany. The network has more than 40 years of concession life left in it.

Transurban expects its increased stake in WestConnex will see it receive more than $600 million of potential capital releases until financial year 2025.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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