A: Transurban’s purchase through a consortium of the AirportM7 link will actually reduce TCL’s direct debt. They say that with the $1.025bn capital raising, only $657m will go to fund the purchase – approximately $350m will be used to repay Transurban’s debt. The purchasing entity, which Transurban will have a 62.5% share of, will take on $950m of new debt.

I don’t think TCL is dangerously overgeared – although I do acknowledge that gearing is on the high side and investors need to be cognizant of this risk.