Banc Sabadell | Abertis (~46% ACS (ACS) net minority interests and 15% of our P.O.) announced that it has been awarded the concession for the Ruta 5 Santiago-Los Vilos highway (Chile), a 223 km highway connecting the capital (Santiago) with the coastal/tourist area of Los Vilos. This is an asset that has been operating for more than 20 years (brownfield) and links the Autopista Central with the Autopista de Los Andes, both operated by Abertis.
The concession contract will start in April 2025 and will entail investments of around €1,000 million (for seven years; ~€140m/year; ~15% capex Abertis’23) aimed, among others, at increasing capacity. The term of the concession is variable (it ends when the value of revenues reaches the amount stipulated in the contract) and has a maximum limit of 30 years.
Assessment: At a strategic level the transaction makes sense and responds to Abertis’ need to increase the average life of its concessions (approx. 14 years) in order to guarantee the generation of future cash flows, especially due to the expiry of relevant short/medium term concessions such as the French (Expiry 2031-33; 36% EBITDA’23) and Italian (Expiry 2026; 7% EBITDA’23). Although it would not have revenues in hard currency, we value positively the inflation protection provided by its tariff system and the fact that Abertis already has a presence in Chile, which we think could allow synergies at the operational level. Finally, the contract does not require any upfront payment for the concession, so we do not think that a capital injection into Abertis by its controlling shareholders (ACS and Mundys) will be necessary.
