LONDON, April 27 (Reuters) - Creditors of Britain’s first pay-as-you-go motorway have launched the sale of the toll road, seeking to recoup debt of about 1.9 billion pounds ($2.77 billion), three sources close to the process said on Wednesday.
The M6toll was opened in 2003 to ease congestion on the non-tolled M6 motorway but has struggled to service heavy debt piled on by Australia’s Macquarie after its initial investment in the operation. That prompted a restructuring of M6toll in 2013, effectively handing control to its creditors.
UBS, acting as adviser on the proposed sale, has sent marketing information to potential buyers and expects first-round bids in May, the sources said.
Spanish toll road operator Abertis, France’s Vinci and Italy’s Atlantia are seen as potential suitors, they added.
The 43 km M6toll is operated by Midland Expressway, which is owned by Macquarie Atlas Roads, through a concession that runs until 2054.
In addition to the 1.9 billion pounds of debt, M6toll has a 180 million pound liability to the government’s Land Fund for use of the West Midlands land covered by the motorway. This would have to be paid off by a new owner or rolled over into new debt.
The M6toll generated core earnings (EBITDA) of 72.8 million pounds last year, up from 62.9 million pounds in 2014.
M6toll declined to comment while a UBS spokeswoman was not immediately available for comment.
Vinci also declined to comment and representatives of Abertis and Atlantia were not immediately available.
Infrastructure funds are also expected to show interest in the sale, though one of the sources said that it could prove difficult to make the numbers work because the presence of a free alternative roads means that tolls cannot be raised easily.
Two of the sources also voiced doubt over the likelihood of the sale recovering the full 1.9 billion pounds owned to lenders, including Germany’s Commerzbank, French bank Credit Agricole and Portugal’s Novo Banco. ($1 = 0.6849 pounds) (Additional reporting by Gilles Guillaume, Dominique Vidalon, Robert Hetz and Francesca Landini; Editing by David Goodman)