Transurban has announced the transfer of Pocahontas 895, in Virginia USA, to the lenders of the asset, a consortium European banks who put up $300m for the pike. Transfer discussions have commenced with the lenders, however the final structure has not yet been agreed. Transurban is working to effect the transfer by October 2013.

In June 2012, after a detailed review of traffic and operating forecasts for Pocahontas 895, Transurban announced that it would reduce the carrying value of the asset. As a result, an equity accounting charge was made in Transurban's statutory accounts for the year ended 30 June 2012 of $138.1 million. The write down had no cash impact at the DRIVe, Transurban or security holder level.

Similarly, there will be no cash impact on a transfer of Pocahontas 895 to the lenders. Pocahontas 895 is carried at no value on the Transurban Group balance sheet.

Transurban also said:

As previously announced, the issues facing Pocahontas 895 are asset specific and do not reflect any broader concerns across the rest of the Transurban portfolio. All of Transurban's other operating assets remain robust with strong expectations for continued growth and free cash generation.

Pocahontas Parkway, an 8.8 mile stretch of highway south of Richmond, Virginia, opened to motorists in 2002 after a four-year construction period. Originally designed and built by Fluor Daniel/Morrison Knudsen, the parkway was repackaged and leased to Transurban in June 2006 for 99 years. Due to serious overestimates in traffic and revenue generation, the parkway was in danger of defaulting on upcoming debt service payments in 2005. In recognition of the parkway's difficulties, Transurban submitted an unsolicited proposal under the Commonwealth's Public-Private Transportation Act (PPTA) for the concession of the parkway.

Source: Transurban