OTPP, Intoll settle lawsuit for A$20m

The Canadian pension will receive the money in exchange for a ‘full and final’ settlement of a 2006 dispute over the timing of a debt converstion in Intoll’s predecessor company, the Macquarie Infrastructure Group.

Intoll, one of the two toll road managers that emerged from January’s split-up of the Macquarie Infrastructure Group, said it will pay A$20 million (€13.3 million; $18.1 million) to settle a lawsuit brought forth against MIG by one of Canada’s largest pension plans.

The C$87.4 billion (€62.3 billion; $84.9 billion) Ontario Teachers’ Pension Plan will receive the money in return for agreeing to a “full and final” settlement of a nearly four-year old dispute over its conversion of A$400 million of MIG debt into equity in 2006.

OTPP argued that MIG breached its contract by not giving it the chance to convert the debt in August 2006, when MIG said it would sell a portion of its US toll road portfolio. MIG countered an October 2006 notice of a shareholder meeting to vote on the deal was the proper “trigger event” requiring it to give OTPP notice that it could convert its securities. In between the two dates, though, MIG shares surged 12.6 percent.

Until it sold its approximate 11 percent interest in MIG last year, OTPP was one of the firm’s largest shareholders. The pension exited its investment for A$343 million shortly before MIG disclosed plans to split its portfolio according to the risk profile.

Intoll, the independently-managed firm that will pay OTPP the settlement, is one of the two portfolio managers resulting from the split. It manages the 407 ETR toll road in Ontario and the Westlink M7 in Sydney, both mature toll roads that pay dividends.

MIG’s remaining toll roads, which are risker investments that won't pay dividends for some time, were placed in a portfolio called Macquarie Atlas Roads. Macquarie Atlas Roads manages the UK’s M6 toll road; France’s APRR tolled motorway network; the US’s Chicago Skyway and Indiana Toll Road, both in Chicago; San Diego’s Bay Expressway toll road; Germany’s Warnow Tunnel; and Transtoll, an Australian toll collection provider.

Intoll shares ended the day up .8 percent, closing on A$1.22.