Macquarie Infrastructure Group is considering splitting itself into two separate entities to enhance value for its shareholders.
The toll road operator and owner said in its full year results presentations it is considering the move in order for its share price to more closely reflect its portfolio value. Macquarie Infrastructure CEO John Hughes said the split vehicle strategy is the most likely option the group will take following a strategic review of its structure which began earlier this year. Hughes said the splitting up of the group is a more likely course of action than alternative strategies which include the sale of assets or raising capital for deleveraging.
Macquarie Infrastructure’s chairman Mark Johnson said current security holders would receive shares in both vehicles should the split take effect, which would effectively provide the same overall asset exposure to their current holding.
The announcement that the group may split up came as Macquarie Infrastructure reported a A$2.5 billion (€1.47 billion; $2.1 billion) pre-tax loss for the full year ending June 30. The loss was driven largely by write-downs to the asset values of its toll-road holdings, which include the 407 ETR in Canada, the M6 Toll in the UK and the Chicago Skyway.
The results are a stark contrast to the previous year when Macquarie Infrastructure recorded a profit of almost A$1 billion.
Should the split go ahead, it would become the latest fund operating under Macquarie’s current listed fund model to break away from its parent company. Last month airport-focused infrastructure fund Macquarie Airports cut ties with its parent company for A$345 million. The fund had previously paid A$547 million in fees over seven years to parent company Macquarie Group to manage it.
Earlier in the year Macquarie Communications Infrastructure Group accepted a A$1.64 billion offer from the Canada Pension Plan Investment Board to take over the company.