when will bbi break cover with a similar report re bbi infrastructure investments.
"Previously, Macquarie Infrastructure had said that it was considering asset sales to boost shareholder value so the fund's use of the word "options" indicates that it is considering other measures that could include a capital raising -- although the fund makes no mention of this.
Macquarie Infrastructure said it will update the market no later than its full-year results briefing due on August 20. By late morning the fund's securities were down 10.4 per cent at $1.205, outpacing the 1.4 per cent fall in the benchmark S&P/ASX 200 index.
In their latest research note, Merrill Lynch analysts say that Macquarie Infrastructure's gearing is too high and Australian fund managers view the listed fund as sub-investment grade.
They say the ratio of net debt to earnings before interest, tax, depreciation and amortisation needs to fall to around nine from 14.4 and to get there Macquarie Infrastructure could give away its US assets, sell its remaining 25 per cent stake in Sydney's Westlink toll road and carry out a discounted rights issue to raise between $1.6 billion and $2bn.
"We can't see a solution that doesn't involve a recapitalisation via some form of capital raising," Merrill Lynch's Matthew Spence, David Porter and Simon Chan say. "
hold beppa only
BBI Price at posting:
6.4¢ Sentiment: Hold Disclosure: Held
