Macquarie Infrastructure Group (MIG) tries to "Americanise" itself
Macquarie Infrastructure looks to US
August 25, 2006
Rod Myer
The Age (Australia)
Copyright 200
MACQUARIE Infrastructure Group is to change strategy in the US, forming a joint venture with New York-based Macquarie Infrastructure Partners to buy a bigger slice of that country's emerging toll road sector.
MIG chief executive Steve Allen said since the US administration blocked Dubai Ports' bid to buy into the US market, there had been significant resistance to foreign infrastructure buyers.
As a result MIG had decided to "Americanise" itself by selling a half share of its four US projects to the unlisted Macquarie Infrastructure Partners — which Mr Allen said is considered a US company despite its Australian heritage.
MIP is incorporated in New York but is a Macquarie offshoot that pays management and performance fees to its Australian parent company. Mr Allen said having a US-based partner would help MIG raise equity there. MIG will be paid $US762 million ($A1 billion) by MIP for half its US assets.
In the year to June MIG recorded a 61 per cent increase in revenue to $783.7 million and a 57 per cent jump in earnings before tax, interest and depreciation from its growing asset base. Net profit fell $348 million to $424.7 million as a result of a big drop in the level of asset revaluation, which MIG treats as income.
Rising interest rates and oil price spikes have made life harder for MIG, slowing the growth of US toll roads and making market less keen to boost infrastructure asset values, Mr Allen said. A new capital management strategy will result in MIG trying to wring more profit from existing assets.
A refinancing of the M6 motorway in England will yield MIG $972 million, $500 million of which will be spent on a share buyback. The market welcomed the buyback and MIG shares rose 10¢ to $3 yesterday. Atul Lele, of White Funds Management, said the buyback "is a positive from a shareholder perspective. It will increase returns per unit".
But MIG is well below its net-asset backing of $3.66 per security. As a result, it paid no performance fees to Macquarie last year and will pay none this year unless the market has a change of heart on the stock.
MIG
Full year ($m) 2005-06 2004-05
Revenue 1056 1381
Depreciation 90.4 85.9
Interest 330.5 295.9
Tax 141.36 (26.23)
Net profit 424.7 772.6
Final div ¢ (Aug 13) 11 13.75
Interim ¢ 10 63.75
© 2006 The Age Company : www.theage.com.au
August 25, 2006
Rod Myer
The Age (Australia)
Copyright 200
MACQUARIE Infrastructure Group is to change strategy in the US, forming a joint venture with New York-based Macquarie Infrastructure Partners to buy a bigger slice of that country's emerging toll road sector.
MIG chief executive Steve Allen said since the US administration blocked Dubai Ports' bid to buy into the US market, there had been significant resistance to foreign infrastructure buyers.
As a result MIG had decided to "Americanise" itself by selling a half share of its four US projects to the unlisted Macquarie Infrastructure Partners — which Mr Allen said is considered a US company despite its Australian heritage.
MIP is incorporated in New York but is a Macquarie offshoot that pays management and performance fees to its Australian parent company. Mr Allen said having a US-based partner would help MIG raise equity there. MIG will be paid $US762 million ($A1 billion) by MIP for half its US assets.
In the year to June MIG recorded a 61 per cent increase in revenue to $783.7 million and a 57 per cent jump in earnings before tax, interest and depreciation from its growing asset base. Net profit fell $348 million to $424.7 million as a result of a big drop in the level of asset revaluation, which MIG treats as income.
Rising interest rates and oil price spikes have made life harder for MIG, slowing the growth of US toll roads and making market less keen to boost infrastructure asset values, Mr Allen said. A new capital management strategy will result in MIG trying to wring more profit from existing assets.
A refinancing of the M6 motorway in England will yield MIG $972 million, $500 million of which will be spent on a share buyback. The market welcomed the buyback and MIG shares rose 10¢ to $3 yesterday. Atul Lele, of White Funds Management, said the buyback "is a positive from a shareholder perspective. It will increase returns per unit".
But MIG is well below its net-asset backing of $3.66 per security. As a result, it paid no performance fees to Macquarie last year and will pay none this year unless the market has a change of heart on the stock.
MIG
Full year ($m) 2005-06 2004-05
Revenue 1056 1381
Depreciation 90.4 85.9
Interest 330.5 295.9
Tax 141.36 (26.23)
Net profit 424.7 772.6
Final div ¢ (Aug 13) 11 13.75
Interim ¢ 10 63.75
© 2006 The Age Company :
posted by Porkus Maximus Tex: at Thursday, August 24, 2006
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