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Post Info TOPIC: MIIF
KK


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MIIF - JPM
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10 Jul 07

24% upside, increasing PT to S$1.40 on acquisition

We are increasing Dec-07 PT for MIIF to S$1.40 as we adjust dividend estimates for TBC stake purchase, provide for higher management fees (base and performance) and incorporate divestiture of MIC and DUET stakes. From current levels, the stock offers 24% upside and 7.74% dividend yield.

Asian assets increase to 21.3% of portfolio following purchase of 20% stake in Taiwan Broadband Communication (TBC) for S$272mn. Management stated that it expects further acquisitions in Asia this year and it is in various stages of evaluating potential targets. We believe MIIF would be able to reach the 50% Asian asset mark well before its declared timeline of next 2-3 years, leading to renewed interest from Asia focused investors.

We expect stock price to gain steadily as investor confidence on managements ability and willingness to execute the restructuring increases. We expect further yield accretive deals funded by sale of non-Asian assets to provide the catalyst. As per our estimates, TBC deal adds about S$13mn to revenues, net of interest cost.

We are increasing our Dec-07 PT to S$1.40 from S$1.35 as we factor in growth in distributions from TBC deal, adjust estimates for Arqiva and include higher base management fees and dilution from performance fees. Key risks include lack of deals in Asia.

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tfwee


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RE: MIIF
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MIIF, macq remains NEUTRAL

- MIIF is reporting its first quarter result on 9 May. The quarterly result involves asset revaluations and dividend income. Of more relevance for investors is the growth in the reported NAV, which we expect will increase from S$1.08 to S$1.10 per share, reflecting solid revaluations of Arqiva and MEIF, offset by the payment of the dividend.
- Since the beginning of the year, MIIF has completed the sale of NMRE, participated in the acquisition of NationalGrid Wireless, and further funded its MEIF investment. While this has drawn down borrowing facilities, we believe MIIF still has ample flexibility to pursue Asian opportunities as S$414m of its assets are liquid. The challenge remains finding Asian infrastructure opportunities given they are keenly sought after by numerous players.
- The quarterly result itself should confirm steady progress in the key assets of Tanquid and Leisureworld, and we expect some improvement in CXP.
- Earnings revision .  We have revised our earnings up on the back of the investment in Arqiva (S$10m) and 1Q asset revaluations (+S$57m). The extent of the increase was dampened by higher base management fees and potential performance fees as a result of the recent share price movement. The dividend expectation is unchanged in 2007 and 2008 and is 0.6˘ higher for 2009.
- MIIF has recently delivered a strong performance, re-rating as a result of he overall surge in the infrastructure sector and the desire for a steady predictable yield. However, fundamentally, MIIF's valuation has only increased with the refinancing and expanded investment in Arqiva and the strong performance of MEIF. Thus the valuation gap between our target price and share price is now 3.3%.
- The fundamentals of infrastructure remain solid, with demand for these assets continuing to grow faster than new assets are coming to market, however the MIIF share price is already reflecting this fact. Therefore, we have lowered our  recommendation back to Neutral.


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KK


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MIIF - BT
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Published April 5, 2007

MIIF to take up its share of Arqiva rights issue

MACQUARIE International Infrastructure Fund (MIIF) said yesterday it will subscribe to the rights issue of a British broadcasting services provider, raising its debt level to 18 per cent of assets. The Singapore-listed fund said in a statement that it has committed to take up its share of the Arqiva rights issue for 87 million (S$259 million) and plans to fund the acquisition by using existing debt facilities. MIIF said its borrowings at the fund level will amount to S$287 million or 18 per cent of its total assets after subscribing for the rights.

The move would bring MIIF's investment in Arqiva, which is raising money to buy 100 per cent of National Grid Wireless (NGW), a broadcast transmission services provider and owner of digital television licences in the UK, to 163.1 million. After the purchase is completed, MIIF will own 8.7 per cent of the merged NGW/Arqiva business, which will make up 30.7 per cent of MIIF's investment portfolio. - Reuters


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KK


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MIIF
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BT, Published December 22, 2006

MIIF sells stake in Europe joint venture for $91m

MACQUARIE International Infrastructure Fund (MIIF) is selling its stake in a renewable energy joint venture in the UK and Europe for S$91 million. It said yesterday that it expects to make a gain of S$27 million from the cash sale of its 50 per cent interest in Novera Macquarie Renewable Energy (NMRE) to its joint venture partner, London-based Novera Energy, which owns various renewable energy assets in Europe.

The sale is part of a broader move to focus its portfolio of assets more on infrastructure investments in Asia, added MIIF. The proceeds will be used to acquire additional assets and repay the drawn amount on its debt facilities, which have been used to provide capital for another of its investments, the Macquarie European Infrastructure Fund.

Novera will pay MIIF 30 million (S$91 million) in cash for the stake, less transaction costs. MIIF said that it is also entitled to receive half the net proceeds from an outstanding indemnity claim which a subsidiary of NMRE is pursuing. Pending the outcome of the claim, Novera has agreed to place 750,000 in escrow for this purpose, said MIIF. The fund bought its 50 per cent stake in NMRE at a cost of 21 million when it listed on the Singapore Exchange in May last year.

MIIF said that the sale price was negotiated on an arms length commercial basis and is close to its own valuation of NMRE at S$89 million three months ago. Gavin Kerr, managing director of MIIF's manager, said: 'To sell our NMRE stake after just 18 months of ownership and earn an internal rate of return of approximately 37 per cent per annum is a very good result.'

He added that MIIF would focus increasingly on investments in Asian infrastructure from now. 'We are pleased with the opportunities for infrastructure investment in Asia and through divestment of assets like NMRE, we are able to begin rebalancing the MIIF portfolio to reflect our increasing Asian focus.'

The sale is subject to MIIF and Novera satisfying certain conditions set out in their agreement. Mr Kerr also said that MIIF expects to pay dividends of four cents per share for the half year to end-December, as forecast earlier this year. MIIF's share price closed unchanged at 98.5 cents yesterday.



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KK


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Macquarie fund acquiring 8 tank storage sites in Germany for S$65m

SINGAPORE : A unit of Macquarie International Infrastructure Fund (MIIF), TanQuid, is buying eight tank storage sites in western Germany for 33 million euros (S$65 million). The latest purchase will help TanQuid consolidate its position as the largest independent tank storage business in Germany.

MIIF believes the business will have a five-year average cash yield of more than 12 percent and an accretive internal rate of return. TanQuid now accounts for about 9.3 percent of MIIF's diverse infrastructure portfolio.

MIIF, managed by Australia's Macquarie Bank, owns, operates and invests in infrastructure businesses around the world.

- CNA /ls



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KK


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Extracts fm DBSVickers Report dated 8-Feb-06,

Looking extremely attractive

MIIF looks attractive at current levels. It is expected to announce 4Q05 results on 24 Feb, with guidance for 3.1 cents dividend for the six months to 31 Dec. Together with the interim dividend of 2.2 cents, total payout for the year should be 5.3 cents. We expect dividend to increase to 7.9 cents for FY06, underpinned especially by maiden contributions from its recently acquired investments – Leisureworld, TSB and CXP. Our fair value is S$1.22, which translates to a target yield of 6.5%. We recommend a Buy.


  • Significant additions to MIIF portfolio. In Nov 2005, MIIF raised S$454.5m at S$0.96 per share to fund its acquisition of Leisureworld, Tank Storage Business (TSB) and Changshu Xinghua Port (CXP). This allowed it to diversify its asset portfolio sectorally and geographically. It includes long term care facilities in Canada, tank storage business in Germany and a port in China. Unlisted investments now make up close to 70% of the total value of its portfolio, compared to around 50% before the said acquisitions.

  • New investments offer strong prospects. Leisureworld, TSB and CXP offer the competitive strengths exhibited by infrastructure assets. Leisureworld is the third largest long term care provider for the aged in Ontario, Canada. This investment offers a stable revenue stream and predictable cashflow because of funding by the Ontario Ministry of Health and Long Term Care. Barriers to entry are high due to the strict licensing requirements. The longer term outlook is positive given the ageing demographics in Canada. TSB is the largest independent tank storage operator in Germany. CXP is located within the Yangtze River Delta industrial zone, a region that offers strong growth opportunities. These new investments are expected to realize an average yield of 10% p.a.

  • Target price is S$1.22. We have addressed some of the concerns raised by investors. Valuations are looking extremely attractive. Our target yield of 6.5% is based on a 25% premium to the target yield of 5.3% from Singapore-listed high yielding stocks and REITs. This gives a fair value of S$1.22. This is supported by our Dividend Discount Model which returned a fair value of S$1.23. We included MIIF as one of our Top 5 picks early this week.


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