Transurban Group (ASX: TCL) shares continue to remain frozen today following the company’s latest capital raising efforts.
Before Monday’s market open, the toll road operator’s shares were placed in a trading halt, leaving them at $14.18 apiece.
What happening in the media regarding Transurban?
According to an article published by the Financial Review, Transurban has been at the forefront of the Australian Competition and Consumer Commission (ACCC).
ACCC chair Richard Sims has highlighted the growing concern that Transurban’s $11.1 billion win gives it a monopoly in the toll operator market.
Yesterday, the company announced that Sydney Transport Partners (STP) will acquire the remaining 49% equity stake in WestConnex from the NSW Government. Transurban secured the initial 51% interest in 2018 for $9.3 billion.
The acquisition will take STP’s total ownership interest in WestConnex to 100%. Transurban owns 50% of STP alongside other strategically aligned partners.
This brings the company to control most of the toll roads in New South Wales, Victoria and Queensland. However, there are fears that having a dominant position, Transurban can force motorists to pay high tolls.
Mr Sims commented on the continuous errors made by state governments to award the company, focusing on short-term profits. This has left out many other competitors who are unable or unwilling to compete.
Using of the WestConnex will increase by either 4% or through inflation annually, whichever is greater. This will continue on for the next 20 years, with the inflation rate taking over from 2040 to 2060.
Transurban owns all tolls roads located in Sydney, besides the Harbour Bridge and the tunnel.
Across its southern state, the company is facing a $450 million cost blowout on the West Gate project. A dispute over the handling of toxic soil along with costs has ensued with its builders CPB and John Holland.
This has led the $10 billion project to be pushed back past 2024. Originally, the company had pencilled in a completion date around November 2022.
Transurban revealed its plans this week to raise $4.2 billion through an equity raise to pay for Sydney’s WestConnex project.
Transurban share price snapshot
Over the past 12 months, Transurban shares have moved in circles, lifting just 3% for the period. Year-to-date, the company’s shares are also 3% higher.
Transurban has a price-to-earnings (P/E) ratio of 172.41 and commands a market capitalisation of roughly $38.93 billion.
The post Own Transurban (ASX:TCL) shares? Here’s why the company is making news again today appeared first on The Motley Fool Australia.
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More reading
- ASX 200 (ASX:XJO) midday update: Transurban acquisition, BHP & Fortescue sink
- Transurban (ASX:TCL) share price halted for $4.2bn WestConnex equity raising
- 5 things to watch on the ASX 200 on Monday
- 2 ASX dividend shares to buy next week
- The Transurban (ASX:TCL) share price is up only 1% this year. Is it a buy?
Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. 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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