Deloitte: ‘Macquarie Communications may struggle to refinance debt’(2)

A report, commissioned as part of a Macquarie Communications Infrastructure Group takeover bid, has revealed that the fund may be forced into significant equity raising if it cannot refinance its debt.

Independent analysts have warned that Macquarie Communications Infrastructure Group (MCIG), an investment fund managed by Australia’s Macquarie Group, may have difficulty refinancing its debt, according to Reuters.

The fund, which needs to repay around A$780 million (€430 million ; $571 million) of debt in the next three years, received a A$1.37 billion takeover bid from the Canadian Pension Plan Investment Board in late March.

The potential refinancing warnings were revealed in a report by consulting firm Deloitte that was commissioned by the Canadian pension as part of its pre-sale due diligence. It said that if Macquarie cannot find fresh financing for its debt it will be forced to undertake significant equity raising.

Last year MCIG, which owns broadcasting companies Broadcast Australia and Arqiva, cut its distributions to shareholders in an attempt save cash to repay debt. The CPPIB bid rallied the share prices across Macquarie’s satellite entities and MCIG, saving the firm an estimated A$440 million in write-downs, according to reports at the time.

MCIG’s directors have unanimously recommended that shareholder’s accept the CPPIB’s bid.