MIIF sells tank storage unit for 89m euros

(SINGAPORE) Singapore-listed Macquarie International Infrastructure Fund (MIIF) said yesterday that it will sell a tank storage unit to a sister fund for 89 million euros (S$186 million).
MIIF said in a statement that it will sell the unit, which represented 10.5 per cent of its portfolio by value, to LODH Macquarie Infrastructure Fund. The company had earlier called for a trading halt for the announcement, which was delayed due to a technical problem.

Proceeds from the sale would be used to repay debt, in line with the fund’s strategy to ‘progressively move its portfolio of assets to be more focused on Asian infrastructure’, MIIF said.

It said on Aug 29 that it sold a 3.2 per cent stake in Brussels Airport for about $110 million. The managers of both MIIF and LODH Macquarie are owned by Macquarie Bank , Australia’s top listed investment bank. — Reuters

MIIF buys Taiwan’s infraVest for 13.3m euros

THE lure of the renewable-energy market has taken Macquarie International Infrastructure Fund (MIIF) to Taiwan, where it has invested 13.3 million euros (S$28 million) to acquire an operator of wind farms. The acquisition of infraVest Wind Power Co Ltd from Asia Wind Co Ltd and Meihui Windpark GmbH & Co KG is subject to regulatory approval and customary closing conditions, said MIIF.

The purchase offers MIIF the opportunity to participate in the emerging Taiwanese renewable-energy market, said Gavin Kerr, managing director of MIIF. ‘We anticipate that the acquisition will be yield accretive to MIIF,’ he said. ‘MIIF is well-positioned to make further investments in the Taiwanese renewable-energy sector as further opportunities emerge.’

The acquisition is priced at an EV/Ebitda (enterprise value/earn-ings before interest, tax, depreciation and amortisation) multiple of nine times, based on a forecast Ebitda of NT$296.2 million (S$13.6 million) for the 12 months ending Dec 31, 2008. The EV (gross debt plus acquisition price) is 58.6 million euros (S$123.4 million).

The payment will be funded by MIIF’s existing committed borrowing facilities, with final settlement expected to occur by the end of this year. infraVest Wind Power operates some 25 wind turbines in Miaoli County in Taiwan with a cumulative installed capacity of 49.8 megawatt, providing an essential service to the local communities. It benefits from long-term power purchase agreements at fixed tariff with Taiwan Power Company.

Besides stable and high Ebitda margins, infraVest also has predictable operating costs arising from long-term operations and maintenance contract with a subsidiary of Enercon Group – the world’s third-largest supplier of wind turbines – and minimal development capital expenditure, MIIF noted.

According to data from the Taiwan Bureau of Energy, renewable energy is estimated to increase to 10 per cent of total electricity capacity by 2010, of which wind generation is expected to make up 80 per cent of that renewable capacity by 2010.

The acquisition is the second Asian asset that MIIF has acquired this year. Including infraVest Wind Power, 17.7 per cent of MIIF’s portfolio will be located in Asia.

‘MIIF continues to develop a strong pipeline of Asian investment opportunities, which it expects will lead to further investments in high-quality Asian infrastructure assets this year,’ Mr Kerr said.

To this end, MIIF said due diligence is underway on a number of acquisition opportunities, while at the same time, it is looking to progressively divest some of its non-Asian assets to fund its Asian acquisition pipeline.

Macquarie fund’s Q2 adjusted net income up

MACQUARIE International Infrastructure Fund (MIIF) has reported a 22.2 per cent rise in adjusted net income to $48.17 million for the three months ended June 30, 2007.

Total investment revenue for the second quarter rose 44 per cent to $60 million, while earning per share was 11.38 cents.

For the half-year period, adjusted net income stood at $52.81 million while total investment revenue reached $70.4 million.

MIIF said the strong results came from solid performances across its portfolio, with the businesses in which MIIF had invested directly performing particularly well. MIIF’s direct investments include stakes in Taiwan Broadband Communications, Changsu Xinghua Port and UK-broadcaster Arqiva.

MIIF will pay a dividend of 4.15 cents per share – an increase of 5.1 per cent on the previous corresponding six-month period – representing an annualised trading yield of 7.9 per cent per annum.

The fund said it expects to sustain and grow the current level of dividend payout over time.

In line with the commitment to focus the portfolio on Asia, MIIF recently divested its stakes in DUET Group, Macquarie Communications Infrastructure Group and Macquarie Infrastructure Company.

The divestments collectively earned MIIF total gross proceeds of about $271.8 million and a combined return of 14.4 per cent per annum against the combined cost of acquisition. The proceeds were used to repay part of the drawn balance on MIIF’s debt facilities.

In April, MIIF took up its share of the Arqiva rights issue for £pounds;87 million (S$266 million) in support of the acquisition of National Grid Wireless for £pounds;2.5 billion by Arqiva’s parent, Macquarie UK Broadcast Ventures Limited.

In July, Arqiva, which makes up more than a quarter of MIIF’s portfolio by value, signed a long-term contract with SDN Ltd to design, build and operate a new high-power national digital terrestrial TV network in preparation for digital switchover in the UK. The contract signed is worth about £pounds;500 million and will run until 2034, the fund added.

The fund said Asia remains attractive as an investment destination for infrastructure due to factors like rising populations and sustainable economic growth which requires investment in new infrastructure and maintenance of existing ones. Plus, ‘the Asian Development Bank estimates that in East Asia alone, the expected infrastructure service needs will be US$165billion annually over the next five years’.

To meet these needs, it is estimated that some 65 per cent of the expenditure would have to be new investment.