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Macquarie Infrastructure Investment Management Limited A Member of the Macquarie Group of Companies ABN 67 072 609 271 AFS Licence No. 241405 Macquarie Infrastructure Group International Limited EC35715
No.1 Martin Place SYDNEY NSW 2000 GPO Box 4294 SYDNEY NSW 1164 AUSTRALIA
Telephone +61 2 8232 7913 Fax +61 2 8232 4713 Internet www.macquarie.com.au/mig DX 10287 SSE
None of the entities noted in this document is an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities. MIG - EGM Presentation ASX Release Cover Letter - 22 Jan 2010_2739382_1 (iManage_ISF).DOC
22 January 2010 ASX RELEASE
Macquarie Infrastructure Group
MIG 2010 EXTRAORDINARY GENERAL MEETING Please find attached the presentation to be given by Macquarie Infrastructure Group (MIG) Chairman, Mark Johnson, MIIML Lead Independent Director, Paul McClintock, and MIGIL Chairman and Lead Independent Director, Robert Mulderig, at the MIG 2010 Extraordinary General Meeting (EGM) which will be held today in Sydney.
For further information, please contact:
Luke Oxenham Jane Rotsey Head of Investor Relations Media Enquiries Phone: +61 2 8232 9658 Phone: +61 401 997 160 Mobile: +61 413 871 056 Email: Luke.Oxenham@macquarie.com
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Disclaimer
Macquarie Infrastructure Group (MIG) comprises Macquarie Infrastructure Trust (I) ARSN 092 863 548 (MIT(I)), Macquarie Infrastructure Trust (II) ARSN 092 863 780 (MIT(II)) and Macquarie Infrastructure Group International
Limited (MIGIL), a Bermudan registered mutual fund company ARBN
112 684 885. Macquarie Infrastructure Investment Management Limited ACN 072 609 271 (MIIML) is the responsible entity of MIT(I) and MIT(II). MIIML is a wholly owned subsidiary of Macquarie Group Limited ACN 008 583 542 (MQG). Macquarie Capital Funds (Europe) Limited (MCFEL) registered number 3976881 is the adviser to MIGIL. MCFEL is a wholly owned subsidiary of MQG.
None of the entities noted in this
presentation
is an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities.
This presentation has been prepared by MIIML (as responsible entity of MIT(I) and MIT(II)) and MCFEL (as adviser to MIGIL) based on information available to them. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, neither Macquarie Group Limited, MIIML, MCFEL, their directors, employees or agents, nor any other person accepts any liability for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it, including, without limitation, any liability arising from fault or negligence on the part of Macquarie Group Limited, MIIML, MCFEL
or their directors, employees or agents.
General Securities Warning
This presentation is not an offer or invitation for subscription
or purchase of or a recommendation of securities. It does not take into account the investment objectives, financial situation and particular needs of the investor. Before making an investment in MIG, the investor or prospective investor should consider whether such an investment is appropriate to their particular investment needs, objectives and financial circumstances and consult an investment adviser if necessary.
Information, including forecast financial information, in this presentation should not be considered as a recommendation in relation to holding purchasing or selling, securities or other instruments in MIG. Due care and
attention has been used in the preparation of forecast information. However, actual results may vary from forecasts and any variation may be materially positive or negative. Forecasts by their very nature, are subject to uncertainty and contingencies many of which are outside the control of MIG. Past
performance is not a reliable indication of future performance.
United States
These materials do not constitute an offer of securities for sale in the United States, and the securities referred to in these materials have not been and will not be registered under the United States Securities Act of
1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration.
Disclaimer
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MIG Structure
MIT(I)Responsible Entity:
MIIML
MIT(I)Responsible Entity:
MIIML
Australian and North American
toll road investments
Australian and North American
toll road investments
UK, European andNorth American
toll road investments
UK, European andNorth American
toll road investments
Australian and North American
toll road investments
Australian and North American
toll road investments
MIGILAdvisor:MCFEL
MIGILAdvisor:MCFEL
MIT(II)Responsible Entity:
MIIML
MIT(II)Responsible Entity:
MIIML
stapled units
stapled units /shares
stapled units /shares
MIGIL – Macquarie Infrastructure Group International Limited (Bermudan mutual fund company)MIT(I) – Macquarie Infrastructure Trust (I) (Australian unit trust – registered managed investment scheme)MIT(II) – Macquarie Infrastructure Trust (II) (Australian unit trust – registered managed investment scheme)MIIML – Macquarie Infrastructure Investment Management Limited (Macquarie Group Limited subsidiary)MCFEL - Macquarie Capital Funds (Europe) Limited (Macquarie Group Limited subsidiary)
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Macquarie Infrastructure Investment Management Limited - Responsible Entity for MIT(I) and MIT(II)
Mark Johnson (Chairman)
–
Non-Executive Director
Paul McClintock (Lead)
–
Independent Director
David Walsh –
Independent Director
David Mortimer –
Independent Director
Macquarie Infrastructure Group International Limited
Robert Mulderig (Chairman & Lead) –
Independent Director
Jeffrey Conyers
–
Independent Director
Dr Peter Dyer –
Non-Executive Director
Mark Johnson –
Non-Executive Director
Board of Directors
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Meeting Structure
Introduction
Overview of Restructure Proposal
Independent Board Committee involvement
Resolutions – MIT(I), MIT(II), MIGIL
Polls
Closure of meeting
Voting results announced to ASX
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Background and Development of the Restructure Proposal
Strategic review early 2009
Aim to unlock value in the portfolio for security holders
This review considered a range of potential outcomes, including:
Strategic Option Comments
E~F=j~áåí~áå=ÅìêêÉåí=ëí~íìë Would not deliver any potential for improvement in underlying security price in the medium term
EÄF=pÉää=~ëëÉíë Unlikely to achieve value generating outcomes
Expected to be value dilutive
EÅF=o~áëÉ=Å~éáí~ä=Ñçê=É~êäó==
ÇÉJäÉîÉê~ÖáåÖ=
Early equity solution not required
Could be dilutive
Joint ownership nature of some assets would make it difficult to resolve early recapitalisations
EÇF=péäáí=îÉÜáÅäÉ Considered to be the most value accretive solution for security holders
Necessary and appropriate to consider leverage and management arrangementsF
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Board responsibilities under strategic review
Split Fund Analysis/Decision Management Arrangements Analysis/Negotiation
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The MIG portfolio will be reorganised into ‘Intoll’ and ‘Macquarie Atlas Roads’ on the basis of risk profile and management requirements
Current MIG security holders will receive 1 Intoll and 0.2 Macquarie Atlas Roads securities for each MIG security they hold
Intoll and Macquarie Atlas Roads will trade separately on the ASX under the codes ‘ITO’ and ‘MQA’respectively
Intoll will become a standalone entity which employs its own management team
Macquarie Atlas Roads will be managed by Macquarie under new management agreements with a new fee structure
MIG has agreed to pay Macquarie:
– $50million for , among other things, its role in facilitating the implementation of the Restructure Proposal and the
provision of assets, services and resources to MIG
– An advisory fee of 1.0% of the post restructure Proposal market capitalisation
of Intoll for financial advisory services
in connection with the Restructure Proposal
– A payment of approximately $25.6 million for the share in MIIML.
This amount is equivalent to MIIML’s
net assets
which comprise cash balances.
MIG security holders will receive a 10 cent per security special distribution
Restructure Proposal at a Glance
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Intoll Profile
Portfolio of Assets Fund Profile
Group Structure Tripled stapled
Group Entities IT(I), IT(II), IIL
Market Listing ASX
Management Arrangements Standalone
Directors’
Valuation of Road Investments A$3,800m
Investment Mandate Potential to grow
Distribution Policy Operating cash flow
AUSTRALIAWestlink M7
CANADA407 ETR
A strong, stable and attractive investment proposition, characterized by:
Long term assets with an 83 year weighted average concession
An established track record of strong asset performance
Solid and growing cash flows from asset distributions
Long term debt maturity profile with a prudent gearing and hedging profile
Agreed an attractive toll escalation mechanisms
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Macquarie Atlas Roads Profile
Portfolio of Assets
UKM6 Toll
USChicago Skyway
Indiana Toll RoadDulles Greenway
EUROPEAPRR
Fund Profile
Group Structure Double stapled
Group Entities Newly incorporated
Market Listing ASX
Management Arrangements Macquarie
Directors’
Valuation of Road Investments A$1,280m
Investment Mandate Currently closed
Distribution Policy None expected in short term
Higher risk return opportunity over the medium term, with a portfolio of assets that have:
Relatively long term assets (with a 46 year weighted average concession life)
Assets that have demonstrated an ability to grow revenue, even under recessionary conditions
No immediate debt maturities, and
Favourable toll escalation mechanisms
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Board Transition Plan
MIG Intoll MQA
Australian Board Mark Johnson (C) New Ind. Dir John Roberts (M)
Paul McClintock Paul McClintock (C) New Ind. Dir
David Mortimer David Mortimer New Ind. Dir.
David Walsh CEO/MD David Walsh (C)
Bermudian Board Robert Mulderig (C) Robert Mulderig (C) New Ind. Dir
Peter Dyer New Ind. Dir Peter Dyer
Jeffrey Conyers New Ind. Dir Jeffrey Conyers (C)
Mark Johnson Paul McClintock David Walsh
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Benefits of the Restructure Proposal
Separate ASX listed groups with more easily identifiable risk return profiles
The potential to improve the combined market rating of Intoll and MQA securities in comparison to the market rating of MIG
Potential for new strategic investors
A reduction in the aggregate cost of management for Intoll and MQA compared to the current cost of MIG management
Access to intellectual property and management in both Intoll and MQA
Intoll may be regarded as more likely to be the subject of a control transaction
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Key Conditions of the Restructure Proposal
MIG Security holder approval
– Security holders are required to approve all of the payments made to Macquarie under the Restructure Proposal for the purposes of Chapter 2E of the Corporations Act
– Ordinary resolutions must be approved by more than 50% of MIG security holders present in person or by proxy
– Macquarie and its associates cannot vote on these resolutions
– Although not a condition of the Restructure Proposal MIG security holders will today also vote on a number of ancillary resolutions that form part of the Restructure Proposal
The Implementation Deed not having been terminated
– MIG is not aware of any such action
ASIC Relief and ASX waivers
– While certain of the relief waivers and confirmations have been agreed in principle, they will not be granted until after the General Meetings.
– MIG will advise security holders in due course of the receipt of
these waivers.
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Proposed timetable if Restructure Proposal is approved
Date Comments
PM=lÅíçÄÉê=OMMV= Announcement
NU=aÉÅÉãÄÉê=OMMV Documents lodged with ASX and ASIC
OO=aÉÅÉãÄÉê=OMMV= Documents mailed to security holders
OO=g~åì~êó=OMNM EGM to vote on Proposal
MIG trades ‘cum’ restructure Proposal (T+3 basis)
fÑ=~ééêçîÉÇW
OR=g~åì~êó=OMNM MIG trades ‘ex’ restructure Proposal (T+3 basis)
Deferred settlement trading in MQA
MN=cÉÄêì~êó=OMNM= Record Date for Implementation of Restructure Proposal and Special Distribution
MO=cÉÄêì~êó=OMNM Restructure Proposal implementation
MIG renamed Intoll (ITO begins trading T+3 basis)
MU=cÉÄêì~êó=OMNM Holding Statements for ITO and MQA dispatched
MV=cÉÄêì~êó=OMNM Normal T+3 trading in MQA commences
NO=cÉÄêì~êó=OMNM MIG interim distribution payable
Special distribution payable
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Independent Board Committee involvement Mr. Robert Mulderig, Chairman and Lead Independent Director (MIGIL)
Mr Paul McClintock, Lead Independent Director (MIIML)
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Independent board committee - roles and responsibilities
To review management agreements in context of MIG board proposal to restructure
To negotiate with Macquarie new management agreements and the transition agreement as required by the structure
The guiding principle for the independent directors in considering the management arrangements was how to enhance and protect value for security holders
The IBC appointed Grant Samuel as an independent financial adviser and Mallesons Stephen Jacques as legal adviser
The process determined the following:
– The two funds require different management skills
– Appropriate that ‘Intoll’
be a standalone entity that employs its own management team
– ‘MQA’
to be managed by Macquarie under new terms that would underpin Macquarie’s commitment to the fundF
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Macquarie has agreed to facilitate a range of outcomes in connection with the Restructure Proposal
Macquarie will be paid an amount estimated to be approximately $103.9 million as compensation in connection the implementation of the Restructure Proposal, comprising:
– $50 million for, among other things, its role in facilitating the implementation of the Restructure Proposal and the provision of assets, services, and resources to Intoll
– An advisory fee of 1.0% of the post Restructure Proposal market capitalization of Intoll for financial advisory services in connection with the Restructure Proposal
– A payment of approximately $25.6 million for the shares in MIIML, the current Responsible Entity of MIT(I) and MIT(II), which holds net cash of the same amount
Macquarie has also agreed to manage MQA under new base and performance fee arrangements
Macquarie’s involvement in the Restructure Proposal
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Independent Expert determined Restructure Proposal is in the best interests of security-holders
The IBC engaged an Independent Expert (Ernst & Young) to provide an independent assessment of the Restructure Proposal for MIG security holders
The conclusion reached by the Independent Expert is that the Restructure Proposal is in the best interests of MIG security holders
This conclusion has regard to all of the advantages and disadvantages associated with the Restructure Proposal
Ernst and Young note that the main purpose of the Restructure Proposal is to encourage a net re-rating of Intoll and MQA relative to MIG and that many of the advantages would be expected to contribute to such a re-rating, although there is no certainty that this will occur.
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Independent Directors Recommend Restructure Proposal
Each MIG independent director recommends that MIG security holders vote in favour of the required resolutions, subject to:
– There being no superior competing proposal, and
– The Independent Expert not changing or withdrawing its conclusion
As of the date of this meeting none of the independent directors is aware of any competing proposal, or the Independent Expert having changed it’s opinion
As Macquarie will receive a financial benefit in relation to the Restructure Proposal, both Mark Johnson and Peter Dyer (given their relationship with Macquarie) have not made any recommendations in respect of the required resolutions.
The independence of the members of the IBC’s are set out in the Explanatory Memorandum
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Formal Business of Meetings
Macquarie Infrastructure Trust (I) and (II) Macquarie Infrastructure Group International Limited
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Agenda Items
MIT(I), MIT(II) and MIGIL
Resolution 1 – Required resolutions approving the Restructure Proposal for all purposes and authorising MIGIL and the responsible entity of MIT(I) and MIT(II) to implement the Restructure Proposal
MIT(I)
Resolution 2 – Authorises the amendment of the MIT(I) constitution
MIT(II)
Resolution 2 – Authorises the amendment of the MIT(II) constitution
MIGIL
Resolution 2 – Amendment of MIGIL Bye-Laws
Resolution 3 – Change of name of MIGIL
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Resolution 1: MIT(I), MIT(II) and MIGIL
MIT(I)Resolution 1 –
Required ResolutionRequired resolution approving the Restructure Proposal for all purposes
MIT(II) Resolution 1 –
Required ResolutionRequired resolution approving the Restructure Proposal for all purposes
MIGILResolution 1 –
Required ResolutionRequired resolution approving the Restructure Proposal for all purposes
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Resolution 2: MIT(I) and MIT(II)
MIT(I)Resolution 2 –
Amendments to ConstitutionAuthorises
the amendment of the MIT(I) constitution
MIT(II)Resolution 2 –
Amendments to ConstitutionAuthorises
the amendment of the MIT(II) constitution
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Resolutions 2 and 3: MIGIL
MIGILResolution 2 –
Amend the MIGIL Bye-Laws
Resolution 3 –
Change of name for MIGIL
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