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China Merchants to bid for Melbourne’s lease
The Port of Melbourne was put up for sale by the Victorian government

China Merchants to bid for Melbourne’s lease

China Merchants will participate to the final stage of the bidding process for the Port of Melbourne’s 50-year lease, Australian media reported.

The second-round bids are due in September this year, with the port set to be sold for at least AUS$6bn despite having a book value of AUS$4.5bn, The Australian claimed.

Other bidders include a consortium comprising investment firms IFM, Macquarie Infrastructure and Real Assets (MIRA) and APG Asset Management, as well as a bidding group backed by Credit Suisse and Gresham including Queensland Investment Corporation, Borealis and Global Infrastructure Partners.

According to local media, reports claimed that the Chinese company would be likely to compete in partnership with an Australian business which might be introduced at a later stage of the process.

In 2014, China Merchants bought the Port of Newcastle from the New South Wales government for AUS$1.75bn partnering with the Melbourne-based funds manager Hastings Funds Management.

According to The Australian, the 2014 deal suggests Hastings Funds Management could be brought in the bidding process for Melbourne as well.

The Port of Melbourne was put up for sale by the Victorian government earlier this year as part of a privatisation program carried out by the country’s government in an attempt to reduce debt and upgrade Australia’s infrastructure.

Indicative bids for the lease were reportedly due in June 2016.