Macquarie listed vehicle falls afoul of NYSE rules

Macquarie Infrastructure Company has 45 days to explain to the exchange how it plans to regain compliance with a minimum market capitalisation standard of $75m.

The New York Stock Exchange has notified Macquarie Infrastructure Company (MIC) that its market value has fallen below a minimum required of companies in its category to remain listed.

The exchange requires that the average market capitalisation of a company listed under the valuation and cash flow category be at least $75 million over a consecutive 30 day period. As of 7 April, MIC’s 30-day average market capitalisation was approximately $65.3 million.

The notice has triggered a 45 day period during which the Macquarie-managed infrastructure investment firm can explain to the NYSE how it plans to regain compliance with the listing standard.

MIC’s shares have fallen 42 percent since the beginning of the year and are down 95 percent from their June 2007 all-time high of $44.20. 

“We are acutely aware of the potential impact of the economic downturn and the tightening of the credit markets on our business,” Peter Stokes, chief executive officer of MIC, said in a statement.

“We believe the price of our shares, and therefore our market capitalisation, overstates the impact of the market conditions and undervalues the current and future cash generating capacity of our businesses,” Stokes added.

Other Macquarie-managed funds faced with similar troubles have opted to put themselves up for sale as a way to close the gap between their market and net asset values. Most recently, the Canadian Pension Plan Investment Board offered A$1.37 billion (€710 million; $930 million) in cash for Sydney-listed Macquarie Communications Infrastructure Group (MCIG), a 67 percent premium on the share price.

MIC said it plans to boost the value of its shares by reducing its debt and cutting operating expenses. It said it expects to have 18 months from the date of the notice to achieve compliance with the listing standards.

MIC owns and operates various US-based infrastructure assets. It has interests in airport services businesses, a 50 percent indirect interest in a bulk liquid storage terminal business, a gas production and distribution business, a district energy business, and an airport parking business.

Its shares were up nearly 10 percent from $2.20 in today's trading, giving MIC a market capitalisation of approximately $100 million.