NH Investment beats Korean rival in a bold bet on $400 mn Aussie-NZ infra portfolio

A consortium led by NH Investment & Securities Co. Ltd. has been named as a preferred buyer for infrastructure assets worth $400 million in Australia and New Zealand, beating the rival bid from another South Korean brokerage firm Hana Financial Investment Co. Ltd.

New Zealand-based Morrison & Co. offered to sell assets held by its first Public Infrastructure Partnership Fund consisting of schools, prison facilities, residence halls and convention centers in Australia and New Zealand, according to sources with knowledge of the matter on August 6. It was first reported by the Seoul Economic Daily early this week.

NH Investment formed a consortium with KDB Infrastructure Investments Asset Management Co. Ltd., or KIAMCO, to bid for the assets. The decision to invest in infrastructure assets came as part of an effort to diversify away from office buildings that suffer from falling demand in the wake of the coronavirus spread.

Hana Financial Investment teamed up with Korean Teachers’ Credit Union and Seoul-based Pine Tree Investment & Management Co. Ltd for the bid, but NH Investment ultimately landed the deal.

Assets included in the vehicle are school buildings, dormitories, convention centers, and prison facilities: a 100% stake in Hobsonville Point Secondary School, 100% of Auckland Prison in New Zealand, and 100% of Bendigo Hospital key health worker accommodation, as well as 100% of NZ Schools I & II. It also holds a 50% stake in the University of Wollongong student accommodation and a 49.9% stake in the Melbourne Convention Center.

Most of them are leased to central and provincial governments with remaining lease terms of 25 to 34 years.

The deal closing is subject to approval by Australian and New Zealand governments. The approval process is expected to be smooth sailing since NH consortium has provided a solid case for acquiring the infrastructure assets.

Earlier, NH Investment has agreed to buy a 6% stake in the natural gas pipeline business managed by Abu Dhabi National Oil Company (ADNOC) as a member of a six-strong group that acquired a 49% stake in the Middle Eastern asset for a combined $10.1 billion, as Korean Investors reported earlier.

Write to Seonpyo Hong at rickey@hankyung.com