Private Equity News & Analysis

MIG to sell Portuguese bridge concession for €112m

The exit comes at a time when the Sydney Stock Exchange-listed infrastructure fund is looking for ways to close the pricing gap between its share price and its net asset value. It recently wrote down the value of the investment by 20 percent.

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Vasco da Gama bridge

Sydney Stock Exchange-listed Macquarie Infrastructure Group (MIG), a global infrastructure fund managed by Macquarie Group, has sold its 30.6 percent interest in Portuguese bridge toll concessionaire Lusoponte for €112 million ($161 million).

MIG wrote down the Lusoponte investment in June by 20 percent to value its interest at €114 million, representing about 2 percent of its total portfolio. The firm will now exit the investment completely by selling its stake to existing Lusoponte shareholders Mota-Engil Concessoes de Transporte and Vinci SA.

The sale will result in a 15 percent internal rate of return for MIG as well as total returns of 2.7 times MIG’s equity contributions since its original investment in Lusoponte in October 1999.

The sale comes at a time when the firm’s shares are trading at a deep discount to its net asset value. Traffic on many of its toll road concessions has softened and major currencies in which its investments are denominated have all strengthened against the Australian dollar in recent months.

The firm earlier announced that it would seek to sell 11 percent of its portfolio. Analysts see this as part of an effort to close the NAV pricing gap by reinvesting the proceeds in itself through a recently announced 10 percent share buyback programme.

Lusoponte was formed to operate and maintain the 25th April bridge over the Tagus River in Lisbon and to build and operate the Vasco da Game bridge nearby. Together, the two are the only crossings over the river. The firm won the two concessions from the local government in 1996 and has about 21 years remaining on both.

At the time, the 25th April bridge was the fifth-longest suspension bridge in the world and its privatisation marked one of most high-profile infrastructure concessions in Continental Europe. 

Though the transaction is expected to close by the end of 2008, the binding offer from Mota and Vinci is subject to preemptive rights held by other shareholders in Lusoponte and final lender consents.

MIG shares traded up 5 percent on the news yesterday, ending the day at A$2.31 per share.