Cheung Kong Infrastructure Holdings (CKI) will recoup only part of its investment in a beleaguered toll tunnel in Sydney after the sale of the A$1 billion (HK$6.6 billion) project for about A$700 million to an ABN Amro-led syndicate, according to the debt-ridden tunnel company's receiver.
KordaMentha, the receiver of Cross City Tunnel since December last year, said yesterday the sale proceeds would sufficiently cover the project's debts and generate a 'significant' return to its equity shareholders.
CKI has a 50 per cent stake in the tunnel while DB Capital Partners holds 30 per cent and Bilfinger Berger owns 20 per cent.
The 2.1km tunnel under Sydney's central business district, which cost A$1 billion to build, failed to service its interest payment on A$560 million debt, as traffic flow was way below forecast since its opening in August 2005. Australian media reported that the debt burden ballooned to A$620 million.
CKI declined to comment on the sale.
Although KordaMentha did not specify how much of the sale proceeds would flow to CKI, some analysts estimated the amount would be A$40 million, a far cry from its A$225 million investment in 2002.
'It is a disastrous investment,' said an analyst with a European brokerage. 'But the sale will bring about an exceptional gain, as CKI has written down the book value of the asset to zero last year.'