View Full Version : Macquarie Airports has lost first $1, now for the second

2nd Oct 2002, 19:37
Thurs "Sydney Morning Herald" 3/10/02

Macquarie Airports has lost first $1, now for the second
By Brian Robins
October 3 2002

Question: what public company has "lost" nearly half of the money it raised within six months of going public?

For a company that hasn't gone belly-up, the incredible shrinking Macquarie Airports has given up more capitalisation in a shorter time than perhaps any other entity still listed on the Australian Stock Exchange.

At yesterday's close of 98c, down 5c on the day, Macquarie Airports has "lost" over $747 million of the $1.67 billion raised since it went public six months ago - over 40 per cent of the total.

The shares were issued at $1, with a second instalment of $1 payable by Tuesday this week.

The shares issued at $1.50 to shareholders to part-fund the Aeroporti di Roma acquisition, along with those issued at $1.53 to institutional investors, are now also trading at just 98c.

Shares in the airport investor have been on the skids since they began trading on the ASX. First it was concerns that it overpaid for Sydney Airport - $5.6 billion, or $600 million more than the nearest bidder - and more recently on worry over a US war on Iraq.

The good news this week was that the Australian Securities and Investments Commission granted Macquarie Bank an extension of the time it can hold on to shares in its ill-fated airports offshoot following the recent disastrous $562.5 million rights issue.

The bad news is that Virgin Blue is ratcheting up pressure on Sydney Airports - 24 per cent held by Macquarie Airports - over airport charges. It has taken its complaints to the National Competition Council, raising the spectre of government controls over what the airport can charge.

This means the airport operator may be forced to give ground on key commercial agreements.

Normally, a review by the National Competition Council takes about four months, although this case could take as long as six months. If the NCC recommends to the Federal Treasurer that airports be a "declared service", it could then take several more months to be finalised by the Australian Consumer and Competition Commission.

The ACCC has made it clear that it wants to oversee airport charges. Just over a year ago, when the Productivity Commission recommended only "loose" regulation of airport services, the ACCC argued it should be able to maintain price caps.

The latest round of bureaucratic deliberations takes place against the backdrop of legal action instituted by Virgin Blue against Sydney Airport over whether agreement had been reached earlier for the sale of the Ansett terminal.

The court hearings are scheduled to commence next March.

The purchase of Impulse Airlines by Qantas Airways left Virgin Blue as the sole operator out of the domestic express terminal at Sydney.

As for the ASIC extension to Macquarie Bank, ASIC gave until March 28 for the sale of the 58.1 million shares taken up in Macquarie Airports as its part of the 99 per cent shortfall.

Macquarie Bank has to sell as it was a non-arm's-length subunderwriter.