Macquarie Infrastructure Group urges patience from investors(5)

The Sydney Stock Exchange-listed toll road developer advised shareholders it is still reviewing options for enhancing the value of its shares. The statement came in response to a regulatory query regarding market speculation. Analysts say the firm’s shares are being weighed down over uncertainty regarding asset recapitalisations.

The Macquarie Infrastructure Group (MIG) has advised shareholders that it has not yet decided on any specific plans for boosting the value of its shares and may not do so for several more weeks.

The Sydney Stock Exchange-listed toll road developer said it is “reviewing options which seek to enhance security holder value” and that “no decision has been made by the MIG boards in respect of any of these options”.

The firm issued the statement after the Australian Securities Exchange made a formal request to the firm regarding market speculation.

Sam Thornton and Ian Myles, analysts at Macquarie Research Equities, had said in a research note written late last month that MIG’s shares have been weighted down by uncertainty over the refinancing of its assets. It’s M6 toll road in Sydney, the Chicago Skyway, South Bay expressway and Indiana Toll Road assets all need a cumulative recapitalisation of about A$1 billion, the analysts said.

“There are a lot of variations on how they can resolve this issue. They have tried selling assets, but the unknown refinancing sum will act as a deterrent to potential buyers,” they wrote in their report.

The firm is among a number of Macquarie-managed listed vehicles that are undergoing a strategic review to close the gap between the price of its shares and its net asset value per share. MIG’s most recent disclosed net asset backing per share is A$3.3, or about two dollars below where the shares have recently been trading.

Earlier this year, Macquarie said that MIG and other funds have various initiatives under way to close these gaps, including major asset sales, debt refinancings, share buybacks and fund privatisations that are “likely to result in a return of capital” from them over the next six months.

The firm said it will update the market about which initiative it will pursue no later than 20 August, when it announces its full year results for the current fiscal year.

MIG shares finished the day down 6 percent, closing on A$1.26 per share.