MIG Toll Road Portfolio Downgrading

Submitted by Jim Thesiger on 17 July, 2009 - 06:41

The value of the toll road portfolio for Macquarie Infrastructure Group (MIG) has seen yet another downgrading worth of $2 billion which might expose the fund for a bid to takeover. The MIG authority has claimed that the present financial crisis was to be blamed for the revaluation. According to MIG authority, the low traffic volume, effect of the change in the foreign currency rate and significant alteration in the asset discount rate motivated the recent value downgrading for the portfolio. In its statement, MIG also added that the change in the interest rate was also to be blamed for the recent downgrading.

However, no break-up regarding the individual valuation of the toll roads were provided. But it is assumed that after the devaluation for four of its US toll roads, the other investments including UK M6, French APRR and Toronto 407 are also to be effected by the recent crisis. There is a possibility that Macquarie Infrastructure Group will follow the footsteps of Macquarie Satellites and might become independent from the parent enterprise or will put together a new plan to reinforce the balance sheet. Turning the company private is another option available on the table for MIG.

According to the investment director of White Funds Management Angus Gluskie, going for a capital raising can be the best option for the company to get out of the hook. Some analysts are optimistic about a take over bid which can be motivated by the recent revaluation. So far, the company seems quite interested for a take over for its currently listed funds. It is to be mentioned that recently Macquarie accepted a take over bid worth of $1.64 billion from the Canada Pension Plan for the Macquarie Communications Infrastructure group. The MIG shares gained 2.5 percent on Thursday taking its stock price to $1.42.