Macquarie Infrastructure Group (MIG) is pursuing toll road acquisitions around Houston, Texas.
INTERVIEW: Macquarie Infrastructure Pursues US PPP's
By Bill Lindsay
Dow Jones Newswires
Copyright 2005
SYDNEY (Dow Jones)--Australian tollroad investor Macquarie Infrastructure Group (MIG.AU) plans to aggressively pursue expansion of its offshore portfolio of roads, aided by an increase in public private partnership (PPP) projects, particularly in the U.S.
"We're coming back into another phase where there are a large number of opportunities available for us around the world," Chief Executive Stephen Allen said Monday at the company's annual meeting in Sydney.
"The U.S. is a really exciting market where a lot will happen but it's also kind of at the stage where there's lots of noise too," he told Dow Jones Newswires.
"Almost half of our roads are in North America and I think long term, the U.S. will be the biggest market for us," said Allen, noting the company is currently seeking investments in Virginia, Oregon, Indiana, and Texas.
MIG is part of a consortium bidding for the Dulles Toll Road project in Virginia, has been named preferred bidder to construct three tollroads around Portland, Oregon, and is pursuing potential toll road acquisitions around Houston, Texas.
Allen told shareholders that MIG's strategy was to participate in as many bidding processes as it could and, "as they develop we can make a final decision about whether to go ahead with the project or not."
He told Dow Jones Newswires that the planned privatization of the Indiana East-West toll road, which links with MIG's 45%-owned Skyway elevated roadway just outside Chicago is also being considered by the company.
"The governor has announced the process is underway and we're having a look at it," he said noting the state government planned to obtain bids from interested parties before deciding if they would enact legislation to enable the privatization of the 251 kilometer road.
One of the noisiest issues is the proposed sale of the iconic New Jersey Turnpike after the election earlier this month of Democrat John Corzine as state governor.
Corzine has stated his support for selling the turnpike and the Garden State Parkway, which have been estimated to be worth around US$22.5 billion and could help the state replenish depleted coffers.
"Every week someone sends me an article saying it's going ahead, it's not going ahead," said Allen, "Corzine said he'd look at it, so who knows what that means."
Allen noted that with Macquarie Bank (MBL.AU) providing a network of around 100 infrastructure executives across North America, MIG remained conscious of opportunities that may present themselves in other high population growth states.
"In Florida there's no legislative impediment, they've got a huge tollroad network but they've gone down the statutory body route, and they keep talking about doing a PPP style deal so Florida's certainly a market we follow."
French Bids
Allen told Dow Jones Newswires that MIG would remain disciplined in its pursuit of the French government's majority stakes in tollroad operators Autoroutes Paris-Rhin-Rhone (APRR) and SANEF, after lodging bids in partnership with French construction group Eiffage in early November.
"We took the view we'd participate but if someone starts bidding too aggressively for it then we'll say it's not for us," said Allen.
"We think they're attractive businesses in their own right, they are a little bit different but one thing is you're getting a whole network, it's not just a single road you're acquiring, with APRR you've got basically the whole network between Paris, Dijon and Lyon."
While noting that the established French road networks were a departure from MIG's usual greenfield investments, Allen said they remained attractive to MIG.
"They're definitely more mature, but they're in good shape, they generate a lot of cash flow, they're significantly under-geared and under-structured and we also think there's also scope to work with the manager to enhance the performance of the business," he said.
Allen also tried to hose down concerns that MIG, like other typically highly geared infrastructure and utility companies, would be financially troubled should interest rates continue to rise.
"Over the next two years 86% of our debt is fixed," said Allen, with that figure falling to 39% in seven years time, "so in the short term we can take prudential measures to lock in our interest rate."
"In the longer term if interest rates rise, our cost of capital becomes more expensive and that is poor for our business," he said.
However he noted that increases in long term interest rates are normally accompanied by rises in inflation, "and all of our tollroads have at least inflation indexed tolls."
"So as long as interest rates and inflation are rising together we are quite well hedged."
The company confirmed it will increase distributions by 20% for the year ending June 30, 2006, to 21 cents per stapled security, and gave preliminary guidance for the following fiscal year of 23 cents a unit.
Payments for both years will be made in two installments and Allen said continuing earnings growth should allow MIG to continue to grow distributions in future years.
MIG securities finished two cents firmer at A$3.67, down from June's record A$4.31.
-By Bill Lindsay, Dow Jones Newswires;
61-2-8235-2956; bill.lindsay@dowjones.com
-Edited by Paul Dekkers
© Copyright © 2005 Dow Jones & Company Inc. asia.news.yahoo.com
By Bill Lindsay
Dow Jones Newswires
Copyright 2005
SYDNEY (Dow Jones)--Australian tollroad investor Macquarie Infrastructure Group (MIG.AU) plans to aggressively pursue expansion of its offshore portfolio of roads, aided by an increase in public private partnership (PPP) projects, particularly in the U.S.
"We're coming back into another phase where there are a large number of opportunities available for us around the world," Chief Executive Stephen Allen said Monday at the company's annual meeting in Sydney.
"The U.S. is a really exciting market where a lot will happen but it's also kind of at the stage where there's lots of noise too," he told Dow Jones Newswires.
"Almost half of our roads are in North America and I think long term, the U.S. will be the biggest market for us," said Allen, noting the company is currently seeking investments in Virginia, Oregon, Indiana, and Texas.
MIG is part of a consortium bidding for the Dulles Toll Road project in Virginia, has been named preferred bidder to construct three tollroads around Portland, Oregon, and is pursuing potential toll road acquisitions around Houston, Texas.
Allen told shareholders that MIG's strategy was to participate in as many bidding processes as it could and, "as they develop we can make a final decision about whether to go ahead with the project or not."
He told Dow Jones Newswires that the planned privatization of the Indiana East-West toll road, which links with MIG's 45%-owned Skyway elevated roadway just outside Chicago is also being considered by the company.
"The governor has announced the process is underway and we're having a look at it," he said noting the state government planned to obtain bids from interested parties before deciding if they would enact legislation to enable the privatization of the 251 kilometer road.
One of the noisiest issues is the proposed sale of the iconic New Jersey Turnpike after the election earlier this month of Democrat John Corzine as state governor.
Corzine has stated his support for selling the turnpike and the Garden State Parkway, which have been estimated to be worth around US$22.5 billion and could help the state replenish depleted coffers.
"Every week someone sends me an article saying it's going ahead, it's not going ahead," said Allen, "Corzine said he'd look at it, so who knows what that means."
Allen noted that with Macquarie Bank (MBL.AU) providing a network of around 100 infrastructure executives across North America, MIG remained conscious of opportunities that may present themselves in other high population growth states.
"In Florida there's no legislative impediment, they've got a huge tollroad network but they've gone down the statutory body route, and they keep talking about doing a PPP style deal so Florida's certainly a market we follow."
French Bids
Allen told Dow Jones Newswires that MIG would remain disciplined in its pursuit of the French government's majority stakes in tollroad operators Autoroutes Paris-Rhin-Rhone (APRR) and SANEF, after lodging bids in partnership with French construction group Eiffage in early November.
"We took the view we'd participate but if someone starts bidding too aggressively for it then we'll say it's not for us," said Allen.
"We think they're attractive businesses in their own right, they are a little bit different but one thing is you're getting a whole network, it's not just a single road you're acquiring, with APRR you've got basically the whole network between Paris, Dijon and Lyon."
While noting that the established French road networks were a departure from MIG's usual greenfield investments, Allen said they remained attractive to MIG.
"They're definitely more mature, but they're in good shape, they generate a lot of cash flow, they're significantly under-geared and under-structured and we also think there's also scope to work with the manager to enhance the performance of the business," he said.
Allen also tried to hose down concerns that MIG, like other typically highly geared infrastructure and utility companies, would be financially troubled should interest rates continue to rise.
"Over the next two years 86% of our debt is fixed," said Allen, with that figure falling to 39% in seven years time, "so in the short term we can take prudential measures to lock in our interest rate."
"In the longer term if interest rates rise, our cost of capital becomes more expensive and that is poor for our business," he said.
However he noted that increases in long term interest rates are normally accompanied by rises in inflation, "and all of our tollroads have at least inflation indexed tolls."
"So as long as interest rates and inflation are rising together we are quite well hedged."
The company confirmed it will increase distributions by 20% for the year ending June 30, 2006, to 21 cents per stapled security, and gave preliminary guidance for the following fiscal year of 23 cents a unit.
Payments for both years will be made in two installments and Allen said continuing earnings growth should allow MIG to continue to grow distributions in future years.
MIG securities finished two cents firmer at A$3.67, down from June's record A$4.31.
-By Bill Lindsay, Dow Jones Newswires;
61-2-8235-2956; bill.lindsay@dowjones.com
-Edited by Paul Dekkers
© Copyright © 2005 Dow Jones & Company Inc.
posted by Porkus Maximus Tex: at Monday, November 21, 2005
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