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4 March 1999
Lend Lease agreement to purchase 25% of Morrison & Co
Lend Lease Corporation Limited ("Lend Lease") today announces that the Lend Lease Group has agreed to purchase 25% of New Zealand based H.R.L. Morrison & Co Ltd ("Morrison & Co"), the Manager of the Infratil group of companies, with rights to acquire 100% over a five year period.
Morrison & Co and the Infratil companies will become the focus of Lend Lease's infrastructure activities in Asia Pacific, and the Infratil companies will have preferred investment rights to any infrastructure development by Lend Lease in Australasia. The investment is subject to final documentation and OIC approval in New Zealand.
This investment links Lend Lease's infrastructure activities with infrastructure investment vehicles.
LEND LEASE INVESTS IN INFRATIL MANAGER
The Directors of Lend Lease Corporation ("Lend Lease") and H.R.L. Morrison & Co ("Morrison & Co") today announced that the Lend Lease Group has agreed to purchase a 25% shareholding in Morrison & Co for an undisclosed sum. As a result of the purchase, Morrison & Co and the Infratil companies will become the focus of Lend Lease’s Australasian infrastructure activities. The Infratil companies will have preferred investment rights to any infrastructure development to be undertaken by Lend Lease in Australasia.
Morrison & Co is the Manager of the Infratil group of companies: Infratil Australia, which operates in Australia and is listed on the Australian and New Zealand Stock Exchanges; Infrastructure & Utilities NZ, which invests in New Zealand utilities and is listed on the New Zealand Stock Exchange, and Infratil International which invests in international utilities and is listed on the New Zealand Stock Exchange.
Each of the Infratil Boards has approved the transaction under the terms of the respective management contracts. Under the terms of the sale and purchase agreement, Lend Lease has a right to increase its shareholding to 100% of Morrison & Co over a 5-year period. David Clarke, an Executive Director of Lend Lease, and Philip Garling, CEO of Lend Lease Capital Services, will join the Board of Morrison & Co.
Philip Garling, of Lend Lease said "Over recent years Lend Lease has viewed the infrastructure sector as having considerable potential. During that time, we have developed substantial expertise in the sector, particularly in greenfield developments. Following a strategic review last year, we decided to use our infrastructure skills to develop a role as an investment manager in the sector."
"The Company identified Morrison & Co as a group possessing a core of world class industry skills in the key infrastructure sectors of electricity, airports and ports. It is also a group to which Lend Lease can add complementary skills and resources."
"We believe that the purchase of Morrison & Co will enable Lend Lease to become the leading player in the infrastructure sector in Australasia, with considerable scope for international development of the operations."
"Lend Lease was very familiar with a number of the investments arranged by Morrison & Co, in particular Perth International Airport and Southern Hydro. This gave us valuable background to Morrison & Co’s investment and management skills in airports and electricity."
Lloyd Morrison, Executive Chairman of Morrison & Co, said "This initiative is very positive for both Morrison & Co and the Infratil companies. With Lend Lease’s support, we can take our skills and operations to another level. We were seeking a partner who could enhance and build on our existing base of operations and expand the opportunities available to the Infratil companies. Lend Lease is a world class group. While pre-eminent in Australia, it is also developing very successfully internationally. The Group not only brings financial strength and depth of knowledge of the financial services sector, it also adds relevant skills in other sectors of infrastructure."
"Lend Lease will enable Morrison & Co and the Infratil companies to become involved in the water and waste water sector, in rail and in greenfield infrastructure developments. Lend Lease was a successful co-developer of the Ord River Hydro scheme and the Tower & Appin coal seam methane power project. It is currently co-developing the BP co-generation project in Brisbane and is the preferred co-developer of the extension of Sydney’s Eastern Suburbs rail link to Bondi beach."
"Lend Lease also has several joint ventures with Suez Lyonnaise des Eaux in the water and waste water sectors. These include the development, ownership and operation of the Prospect Water Filtration Plant — one of the largest plants in the world — which supplies 80% of Sydney’s drinking water. Lend Lease is also co-constructor and will be co-operator of the Manukau waste water plant in Auckland."
"Because of the very specialist nature of much of our work and the importance of our existing investment relationships, we were very focused on choosing a partner who would enable us to retain our existing team and goals. It was also critical that the partner would add to our ability to provide the Infratil companies with value enhancing investment opportunities across an increased range of infrastructure activities. We are confident that Lend Lease will more than measure up as such a partner."
The investment is subject to final documentation and OIC approval in New Zealand.
For further information contact:
In Australia:
Mr Phil Garling,
Lend Lease Capital Services
ph: 02-9237-5999
mobile: 0419-257-257
Mr John Clarke,
Morrison & Co (Australia)
ph: 07-3220-0949
mobile: 0412-485-173
In New Zealand:
Mr Lloyd Morrison,
Morrison & Co
ph: 473-2399
mobile: 021-661-396
FACT SHEET
Lend Lease
Lend Lease Corporation is an Australian based international real estate and financial services group operating in Australia, New Zealand, North America, Europe, Asia and South America.
Established in 1958, Lend Lease Corporation is listed on the Australian and New Zealand Stock Exchanges and is one of Australia’s top twenty listed companies. It has a current market capitalisation of approximately A$11.1 billion.
It has achieved 23 consecutive years of profit growth. Operating profit after tax was A$363.9 million for the financial year ended 30 June 1998.
Funds under management total A$71.3 billion, with A$46.2 billion in property assets under management on five continents (as at 31 December 1998). Lend Lease’s global real estate investment management ranks as one of the largest in the world.
Lend Lease has a long term AA credit rating from Standard & Poor’s Rating Services, and an A3 credit rating from Moody’s.
Lend Lease’s two Key Business Activities are:
Real Estate:
- Real Estate Investments
- Property Development
- Project Management and Construction
- Capital Services (infrastructure)
Financial Services:
- Funds Management
- Life Insurance and Wealth Protection
The Group also manages exposure to Information Technology and Equity Investments.
The Group frequently partners with organisations globally which bring specific skills or business development opportunities.
Morrison & Co
Key information about Morrison & Co and each of the Infratil companies can be obtained from the following web site: www.infratil.com
Morrison & Co is a specialist infrastructure advisory house established in August 1988. The firm operates from key offices in Brisbane, London and Wellington with additional staff based in Melbourne and Sydney.
Morrison & Co is a specialist advisor to major infrastructure industries including electricity, airports, ports, gas, railroads, water and wastewater. The firm has developed substantial technical expertise in the areas of restructuring and industry reform, utility-based corporatisation and privatisation, utility regulation and competition pricing policy, wholesale electricity market design and electricity contracting, utility pricing theory and project structuring and finance.
In addition Morrison & Co has management contracts for three specialist infrastructure advisory investment companies:
Infratil Australia
Listed on Australian and NZ Stock Exchange.
Market Capitalisation: approx. A$275 million.
Key investments:
- Perth International Airport (49.5% owned): 4.8M passengers, serving as the international and domestic hub for estern Australia.
- Southern Hydro (50.2%): 480MW hydro based peaking generation system based in Victoria.
- Northern Territory Airports (51%): comprising Darwin, Alice Springs and Tennant Creek airports handling approximately 2M passengers annually.
- Port of Portland (100%): medium sized bulk port based in Southern Victoria.
- StateWest (50%): supplier of gas and diesel fueled generators to the mining industry in Western Australia.
Infrastructure & Utilities NZ
Listed on NZ Stock Exchange.
Market capitalisation: approx. NZ$250 million.
Key investments:
Wellington International Airport (66% - subject to Special Meeting): 3.5M passenger airport serving NZ’s capital city and surrounding area.
TrustPower (25.8%): National electricity generation and supply company. Infratil has a shareholders’ agreement with Alliant International, a North American energy utility which owns 8.6% of TrustPower.
Port of Tauranga (24.6%): NZ’s largest bulk port, based in Tauranga.
Infratil International
Listed on NZ Stock Exchange.
Market capitalisation: approx. NZ$35 million.
Operates as an international investor in infrastructure and utilities companies.
Key Investments:
- Airport Group International (11.8%): US headquartered international airport owner and operator.
- Sea-Land (Australia) Terminals Services (50%): Joint venture to establish a new container terminal at the Port of Brisbane.
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