Santander | In a significant event, Abertis (BBB- e, BBB e) has announced that the Texas Department of Transportation (TxDOT) has decided to proceed with the repurchase of the SH-288 toll road in Texas, which has been owned by ACS Group and Abertis since November 2020. TxDOT will make a payment of $1.732bn, of which $520mn will be used to repay debt associated with the project, while Abertis will receive compensation of $688mn for its 56.76% stake. The termination of the deal will result in a non-cash loss of around €555mn after tax and excluding provisions. Taking into account the reversal of provisions, the net loss will amount to approximately €418mn in 2024. Abertis has stated that it ‘does not expect this transaction to affect its credit rating or dividend policy’.
Research view: We were surprised by the news, as we had expected the negotiations to conclude with a favourable outcome; we assumed that ACS and Abertis would offer TxDOT better terms and that TxDOT, in turn, would avoid having to take over the day-to-day management of the toll road. We believe that the decisions made by TxDOT, while adhering to the terms of the contract, send a negative signal for US toll road projects. We believe that Abertis’ credit profile will not be significantly impacted by the accounting loss, so we maintain our Neutral recommendation.
