Macquarie International Infrastructure Fund Limited to Acquire 100% of Tank Storage Business in Germany

19 September 2005

Macquarie International Infrastructure Fund Limited (“MIIF”) today announced an agreement to acquire 100% of the German tank storage business (“TSB”) from LEHNKERING GmbH (“LEHNKERING”).

TSB is an oil and chemicals tank storage business and the largest independent provider of oil storage services in Germany.  TSB is currently a non-core division of LEHNKERING, a predominantly logistics and services company that was purchased by German private equity fund Triton in 2004. 

The TSB asset will be acquired by Deukalion Tanklager GmbH & Co. KG, a wholly owned limited liability German partnership established by MIIF.

MIIF notes that its total equity investment will be approximately S$100 million¹, however as the final acquisition price is subject to completion arrangements and transfer of assets, enterprise value and debt levels will be advised to the market on completion.  Following completion of the acquisition, the TSB investment is expected to comprise approximately 12 per cent of the MIIF portfolio². 

Completion is expected to occur by the end of 2005, following the satisfaction of certain conditions including merger clearance and various consents. 

The TSB investment is expected to provide stable and sustainable cashflows from day one, including an initial cash yield to MIIF in 2006 in excess of 12 per cent³.

Under the acquisition agreement, TSB’s well-regarded existing senior management team will be retained by MIIF. 

Mr Greg Osborne, the Managing Director of MIIF’s Manager said the direct investment in TSB represents MIIF’s first wholly owned business and first acquisition since listing.

“MIIF’s acquisition of TSB is an excellent addition to the MIIF portfolio, providing further diversification and entry into the tank storage infrastructure sector in Germany.  TSB is a strong cash generating business and is expected to enhance MIIF’s yield to shareholders from 2006.

“Going forward, MIIF will continue to utilise its affiliation with the Macquarie Bank Group to actively pursue a number of acquisition opportunities that meet our investment criteria,” Mr Osborne said.

In keeping with MIIF’s investment criteria, the acquisition of TSB has a number of attractive investment attributes for MIIF, including:

• Market leadership position as the largest provider of independent oil storage services in the German market;
• Essential assets with a strong competitive advantage, as a result of TSB’s significant presence at major industry centres throughout Germany and limited land availability for future storage facilities;
• Stable and sustainable revenues, reflecting the essential nature of TSB’s oil and chemical storage and handling services that cannot be readily substituted.
• Long-term relationships with highly credit-worthy customers and solid track record of contract renewal (average length of existing relationships in excess of 20  years), which contributes to TSB’s stable and sustainable revenues;
• Experienced senior management team which will be retained; and
• Potential for growth in the medium term through add-on acquisitions in the sector.

MIIF’s advisor on the acquisition is Macquarie Corporate Finance, Frankfurt⁴.

Acquisition Funding

MIIF will fund the acquisition of TSB through a combination of non-recourse senior debt and equity to be provided by MIIF.  MIIF’s equity contribution will be bridged initially by short-term borrowings and refinanced through the issue of new shares. 

Update on MIIF Dividends

The Directors of MIIF have reiterated their intention to declare and pay a semi-annual dividend for the six months ending 31 December 2005 of between 2.8 cents to 3.5 cents per share as set out in the MIIF prospectus dated 20 May 2005.

About TSB

The TSB business to be acquired by MIIF consists of 10 tank storage sites strategically located close to major industry centres throughout Germany including the Rhine Ruhr industrial area, Munich, Berlin, Frankfurt and Hanover.

TSB’s revenue is derived from three core activities:

• Strategic oil storage: with EBV, the Government related authority responsible for Germany’s strategic oil stocks;
• Other oil storage: with oil majors and independent marketers and traders; and
• Port/chemicals handling and storage: TSB’s facility at the inland port of Duisburg handles and stores chemicals for the local chemicals industry.
  
  
• Download MIIF Presentation Regarding TSB Acquisition  (pdf 465 KB)

¹ Equity commitment has been agreed by the parties on arm’s length terms. The acquisition is an asset purchase of a portion of LEHNKERING’s business.  As such, the vendor has not previously attributed an audited book value to the tank storage facilities.
² Based on equity contribution amount.
³ Pre MIMAL management fees.
⁴ MIIF has obtained confirmation from an independent accountant that the advisory  services terms and fees are reasonable for assignments of this nature if the parties were dealing at arm’s length.

The initial public offering of the ordinary shares of Macquarie International Infrastructure Fund Limited was sponsored by Macquarie Securities (Asia) Pte Limited.

For further information, contact:

Media Enquiries
Jane Rotsey
Public Affairs Manager
Mobile: (61) 401 997 160
Email: jane.rotsey@macquarie.com

Investor Enquiries
Lianne Buck
Macquarie International Infrastructure Fund
Tel: (61 2) 8232 3965
Email: lianne.buck@macquarie.com