Australian Infrastructure Fund to raise A$211m

The capital raised through an entitlement offer will be used to repay an existing debt facility and fund growth initiatives in its Australian airport portfolio.

The Australian Infrastructure Fund (AIX) intends to raise approximately A$211 million ($167 million; €120 million) from retail and institutional investors. The capital will be raised through a one for two non-renounceable pro-rata entitlement offer at A$1.10 per share. 

AIX last traded at A$1.62 on the Australian stock exchange. Its shares have been halted from trading until the entitlement offer is completed.

“Following the equity raising, AIX will have no drawn fund level debt, will be in a position to fund all anticipated asset level capital requirements and will have greater financial flexibility,” according to an AIX statement.

The capital raised will be used to repay the AIX’s existing debt facility currently drawn to A$159.5 million as well as to finance future acquisitions in its Australian airport portfolio. The fund is also in the final stages of securing an A$30 million two-year debt facility.

The performance of the AIX’s Australian airport assets has been “encouraging” while its European airport assets “have experienced greater relative passenger declines”, the firm said.

In the next three years, AIX expects to inject up to A$42.2 million in Perth Airport, in which it has a 29.7 percent stake.

The fund is “informal discussions” to divest its 10.1 percent stake in Australia Pacific Airports Corporation “on the basis that AIX will not divest below the assets independent valuation”. Australia Pacific Airports Corporation owns Melbourne Airport and Launceston Airport.

AIX is also considering acquiring a 50.1 percent stake in Cairns and Mackay Airports, both located in Queensland.

Managed by Melbourne-based Hastings Funds Management, AIX manages approximately A$1.4 billion of transport infrastructure assets as of 31 December 2008. The fund’s portfolio currently includes airport, seaport, toll road and rail assets across Australia and Europe.