Macquarie Group is thinking of shutting down its Singapore-listed infrastructure fund after selling some of its assets in China such as a highway and a port. Macquarie officials don’t believe that its share prices will have any effect on the price of these holdings. The plan was first proposed by CIMB Group Holdings, which is Macquarie’s advisor. According to the chairman of Macquarie International Infrastructure Fund (MIIF), Chiang Meng Heng, the fund has something around $59 million in cash. This excess cash will be spent as a special dividend.
In an official statement, Heng stated that they are looking forward to narrow down the discount. Heng added that it is almost impossible to bridge the gap between the net asset value and share price in the current global economic situation; hence, the company has decided to return some money back to the shareholders.
Incidentally, the fund was started 7 years ago and Macquarie group has decided to shut it down because of the fact that it didn’t find any good asset in Asia which can boost the share prices. The announcement of this plan had positive effects on the share prices of the fund as the same jumped up by 1.6% and is at 63.5 Singapore Cents currently. The fund advanced by 5.9% on yesterday as well, however, is still down by 11%, if compared to the net asset value as estimated in last June. Heng however hasn’t confirmed a date for completing the distribution process. However, it is expected to be organized during February, 2013, when the half-year dividends will also be paid. Incidentally, the fund buys substantial or majority interests in the infrastructure businesses therefore trying to have influence or control on the same.
Value Investment Principals’ Chief Executive Officer, Sandy Mehta denoted this move to be positive for the Macquarie group. He added that the special dividend, combined with regular ones, should be around 8 cents.
Macquarie International Infrastructure Fund currently has 4 assets in total: 38% stake in the Cargo Port of Eastern China: Changshu Xinghua, 47.5% interest on one of the largest cable-television infrastructures of Taiwan: the Taiwan Broadband Communications, 81% stake in the Hua Nan Expressway and a Taiwanese Wind Farm Miaoli Wind. Based on the books of the fund, Miaoli Wind has no value currently.