Macquarie Int’l sells its MEIF stake

MACQUARIE International Infrastructure Fund (MIIF) has sold its remaining 1.8 per cent interest in Macquarie European Infrastructure Fund (MEIF) to several investors for $50.4 million.

The divestment will generate an internal rate of return of about 4.6 per cent on a proportionate basis.

MIIF earlier divested a 4.5 per cent interest in MEIF for $132 million. This means the proceeds from the sale of its entire 6.3 per cent stake are $182.4 million.

MIIF also received distributions of $52.6 million from its investment in MEIF. It first bought its entire interest in MEIF for $194.8 million in July 2005.

MIIF will retain proceeds from the latest stake sale for ‘balance sheet flexibility’.

It can also use the funds for re-investment, share buy-back or a special dividend payment. But in the short to medium term, MIIF’s board does not expect the divestment to have a material impact on the fund’s dividend profile.

According to John Stuart, CEO of MIIF’s manager, the fund’s portfolio is now fully made up of direct investments mainly in Asia. ‘We will continue to explore a range of options to address the significant disconnect between MIIF’s prevailing share price and the directors’ valuations of its businesses,’ he said.

MIIF units closed unchanged at 43 cents yesterday.

For the quarter ended Sept 30, MIIF’s net profit attributable to equity holders, on an adjusted basis, was $23.6 million – 56 per cent lower than a year ago. This followed a 55 per cent drop in revenue to $25.4 million.

For the nine months ended Sept 30, MIIF’s net profit attributable to equity holders, on an adjusted basis, was $51.7 million – 37 per cent lower than in the previous year. Revenue fell 44 per cent to $56.9 million.

MIIF’s net asset value per share at Sept 30 was 80 cents.

Source: Business Times, 19 Dec 2009