MIIF – BT

Macquarie Fund buys China expressway stake

MACQUARIE International Infrastructure Fund Ltd bought an 81 per cent stake in the Hua Nan Expressway in China for about four billion yuan (S$773.8 million), its first toll road investment in the world’s fastest-growing major economy.

The fund, managed by Sydney-based Macquarie Group Ltd, will finance the purchase from the sale of stakes in Brussels Airport and oil operator TanQuid, along with existing debt facilities, it told the Singapore stock exchange yesterday.

Managing director Gavin Kerr is selling non-Asian assets so he can focus on acquisitions in countries such as China, where vehicle sales rose almost 25 per cent in the first nine months of this year. The 31-kilometre Hua Nan Expressway runs through the centre of Guangzhou, the capital of Guangdong province and China’s third-most populous metropolitan area, the fund said.

‘Toll roads are cash generators and with low operating risk,’ said James Chua, who helps manage US$400 million of assets for Philip Capital Management in Singapore. ‘They are a good proxy for anybody who wants exposure to China’s infrastructure.’

The acquisition allows the fund to profit from Hua Nan Expressway’s tolling rights until 2026, and 13 per cent annual growth in traffic on the road since 2004, it said. — Bloomberg

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