Macquarie International Infrastructure Fund

Macquarie International Infrastructure Fund Limited (MIIF or Fund) today announced that it has agreed to sell 71.6 per cent of its interest in Macquarie European Infrastructure Fund (MEIF) to a number of financial investors for a total cash consideration of S$131.4 million (€63.0 million) (the Divestment). MIIF acquired this interest in MEIF for S$139.5 million in July 2005 and has received proportionate distributions of S$35.3 million (€17.4 million) from this investment. The Divestment is subject to customary closing conditions.

- The Divestment is at a 105.9 per cent premium to the value of MEIF implied by MIIF’s prevailing share price.
- The Divestment will enable MIIF to realise an internal rate of return of approximately 5.5 per cent on a proportionate basis.

MIIF will use a portion of the sale proceeds to repay the drawn balance of its debt facilities of approximately S$19.0 million. The remainder of the proceeds will be retained by MIIF to provide balance sheet flexibility for the Fund. Options available to the Board include reinvestment of the proceeds, share buy-back or payment of a special dividend, if it considers such an action to be beneficial to shareholders.

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I consider this a good news. The divestment is in line with MIIF's intentions to pare down it's European assets to focus on the Asian portion.

As I type this, MIIF has ballooned to near 40 cents, giving me a paper gain of almost 1.2k at the moment, more than sufficient to cover the other penny stocks.

However, there are still some who are a little more concerned about it's fundamentals. The magazine, Pulses, had a write-up in their Oct 09 issue. I shall do an overview on it when I find the time to do so.