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Macquarie Infrastructure Corporation Message Board

  • t129purple t129purple Apr 24, 2011 12:28 PM Flag

    Results & Dividend

    Haven't been here for quite awhile and I see the stock has climbed nicely.

    What's the story on the dividend announcement? They say they are going to declare a dividend, yet they need the money from the bulk storage business and their partners told them no. How do you say you're declaring a dividend and don't have the dough to pay it? I know they will go to arbitration, but that could take up to a year based on the announcement.

    Airport services doesn't appear to have improved their EBITDA to any great extent over the past couple of years. In 2008 they got creamed when oil went to $150/bl, what is the prognosis now with oil climbing and business jets still in the tank? Any thoughts from those that have feel for the industry?

    Listened to the last call but the audio was jibberish so I gave up.

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    • From what I remember, the issue was the size of the dividend -- they said they could pay more if they got the consent or won their arbitration against their co-owner of the bulk storage business.

      • 1 Reply to marklibera
      • I took it as $0.20 without IMTT and $0.375 per share with IMTT's OK .

        ...In resuming its dividend, MIC had expected to include certain funds from the cash flow of its 50% equity interest in International Matex-Tank Terminals (IMTT). Distribution of funds to MIC from IMTT is governed by the Shareholders’ Agreement between MIC and the co-investor that owns the remaining 50% stake. The co-investor has refused to vote in favor of distributing these funds, and MIC believes that such a refusal violates the Shareholders’ Agreement.

        As a result, MIC has formally initiated the dispute resolution process in the Shareholders’ Agreement, and intends to proceed to arbitration with the co-investor if a satisfactory resolution cannot be reached within the timeframe prescribed in the Shareholders’ Agreement. MIC management has made good faith efforts to resolve this matter with the co-investor, but no agreement has been reached.

        The amount that the co-investor offered to pay under certain proposed compromises was substantially below the amount required under the Shareholders’ Agreement. The amount was also below that which MIC considered reasonable for its shareholders while continuing to provide for the growth and profitable operations of IMTT.

        MIC is disappointed with this development and will vigorously pursue its right to all contractually owed funds. The Company believes the terms of the Shareholders’ Agreement are indisputable and is confident it will prevail in arbitration, which is expected to last up to one year.

        Contingent upon the favorable outcome of the arbitration and the continued recovery of operating and capital market environments, the Company believes it could increase its quarterly dividend to as much as $0.375 per share. Assuming the payment of full dividends under the Shareholders’ Agreement, IMTT would remain one of the best capitalized companies in its industry with strong cash reserves available for investment in further growth capital expenditures.

        Despite the current disagreement, MIC expects that it will be business as usual for IMTT and IMTT management. This is simply a shareholder dispute between MIC and the co-investor in IMTT. Both parties share the common goal of seeing IMTT meet its potential, and plan to continue working together in pursuit of this goal. Management will continue to successfully run what MIC believes are the best terminals in North America.

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