Macquarie International Infrastructure Fund Limited (MIIF) - MIIF to Acquire Chinese River Port

24 October 2005

Highlights:

• MIIF to acquire 38% interest in Changshu Xinghua Port
• Five year average cash yield in excess of 13%¹
•  Will represent 9% of MIIF portfolio on financial close

24 October 2005, Singapore – Macquarie International Infrastructure Fund Limited (MIIF) today reached agreement to acquire a 38% effective equity interest in Changshu Xinghua Port (CXP), a multi-purpose cargo port located within a high growth industrial zone along the Yangtze River, 90km west of Shanghai.

MIIF will acquire the 38% interest in CXP by acquiring 40% of Singapore Changshu Development Company (SCDC) which has a 95% interest in CXP. Pan-United Corporation (Pan-United), a Singapore-listed company and the cornerstone investor in SCDC, will sell-down 26% of its 80% shareholding in SCDC. Two minority shareholders will sell down 14% of their combined 20% interest in SCDC.

The 38% equity interest in CXP will be acquired for S$112.6 million² (RMB537.1 million). An additional S$45.4 million (RMB216.4 million) is payable over the next three years subject to a performance based earn-out arrangement. 

MIIF anticipates CXP will provide a growing yield with a five year average in excess of 13% reflecting the expected growth in trade and economic activity in the region.

Mr Gregory Osborne, Managing Director of MIIF’s Manager, said: “When we listed MIIF in May 2005 we stated our intention to invest in Asia. Within five months we have achieved our first significant investment in Asia. Through CXP, MIIF intends to establish its presence in China allowing opportunities for future investments in the region. In addition, CXP introduces an attractive new asset class to MIIF’s diversified portfolio of infrastructure investments.

“CXP is a high quality port with a deep natural draft and is the furthest point upstream from Shanghai able to efficiently accommodate larger vessels. The port benefits from two way traffic to a large catchment area covering Shanghai, Jiangsu Province and Zhejiang Province. The port has eight berths with 1,500 metres of jetty.

“MIIF will work closely with Pan-United, an experienced port developer and operator, to enable access to future growth in this market. CXP’s large hinterland with its strong steel and forestry industries is expected to benefit from robust Chinese and global trade necessitating increased future water cargo transport through the port,” Mr Osborne said. 

In addition to CXP, MIIF has announced the proposed acquisition of Leisureworld LTC and the acquisition of a German tank storage business.

MIIF reconfirmed its earlier dividend guidance of 3.75 cents per share on existing assets and 3.95 cents per share on existing assets and acquisitions (subject to shareholder approval) for 1H 2006.

MIIF also reconfirmed its dividend guidance of 3.0 cents per share on existing assets and 3.1 cents per share on existing assets and acquisitions for 2H 2005.

The revised dividend guidance provides an annualised yield of 8.8% for the 2005 period since listing in May and an annualised yield of 7.9% for 2006 based on MIIF’s closing market price on 20 October 2005.

Financial effects

The financial effects of the proposed acquisition of Leisureworld LTC and TSB updated to include the acquisition of CXP are set out below.

Share capital and borrowings

Net Asset Value

Earnings per share

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1 Pre MIMAL management fees
2 Includes transaction costs of S$5.9 million

For further information, contact:

Lotte Pang
Macquarie Group Public Relations
Tel: (852) 6401 8859
Email: lotte.pang@macquarie.com

Investor Enquiries
Stuart Green
Head of Investor Relations
Tel: (61 2) 8232 8845
Email: stuart.green@macquarie.com