Thursday, October 22, 2009

MIG: "Debt of A$30 billion across a portfolio including highly leveraged and poorly performing road assets concentrated in Europe and North America."

Macquarie Infrastructure Stake Sold


Wall Street Journal
Copyright 2009

SYDNEY -- The second-largest investor in Macquarie Infrastructure Group has sold its stake, traders said Friday, ahead of the global toll-road operator's expected move to sever its relationship with investment banking parent Macquarie Group Ltd.

According to a number of traders who didn't want to be named, the 244.7 million securities in MIG representing 10.8% of its issued capital were sold by Canada's Ontario Teachers' Pension Plan Board.

Canada's largest private pension fund with over C$87 billion (US$90.48 billion) in assets at December 2008, held an 11.7% stake in MIG at June 30, behind only Macquarie's 17.3% stake on the register.

The stake is being offered to institutional investors at a price of 1.40 Australian dollars (US$1.29) a security through an institutional bookbuild handled by J.P. Morgan, according to the traders.

A spokeswoman for MIG had no comment on the transaction, while spokesmen for JPMorgan and OTPP weren't available for comment.

The likely sale by OTPP comes as MIG mulls a split of its toll roads into two separate listed entities with different leverage and growth profiles and also considers severing its management agreement with Macquarie in an effort to make the group more palatable to investors and boost security holder value.

The proposed split, which many market watchers expect to be revealed at MIG's annual meeting Oct. 30, follows a review that has stretched over a number of months as the group grappled with debt of around A$30 billion across a portfolio including some highly leveraged and poorly performing road assets concentrated in Europe and North America.

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