Macquarie Airport in bid to offload stake in Japan Airport Terminal

21 May 2009

Australian group Macquarie Airports proposes selling its entire stake in Japan Airport Terminal (JAT) back to JAT.

In the process it is taking a loss of about $20 million and a 22 per cent cut in its guidance for the distribution for 2009 which according to analysts, amounts to a substantial price for the extra cash involved in the transaction.

The plan to try and divest the 15-per cent stake in JAT in a buyback arrangement was disclosed in a statement to the Australian exchange ASX yesterday.

The buyback would be put up to shareholders for approval on 26 June according to the ASX filing.
 
"While we still expect JAT's strategy to bear fruit, the external environment has changed significantly since we made the investment and, given the size of our interest, we will not have the opportunity to apply our active management,'' Kerrie Mather, MAp's chief executive said in the statement.

If MAP's entire 15 per cent interest should be acquired at the tender offer price, MAp would expect to realise a maximum of about $260 million, a loss on book of around $20 million, as MAp explained in the statement.

"Should MAp's entire interest be acquired at the tender offer price, MAp would expect to realise a maximum amount of approximately A$260m including the benefit of hedging arrangements that were previously entered into, versus the A$280m at which the interest in JAT was recorded at 31 December 2008.

If that buyback would go according to plans Macquarie Airports will have cash in hand exceeding well beyond $750 million but at a cost of the sharp fall in distribution.