Thursday 3rd March 2005
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The trading halt was requested by Prime Infrastructure to enable the Company to undertake and complete a placement of stapled securities.
The halt will remain in place until the earlier of close of business Friday, 04 March 2005, or an announcement by the Company.
In a statement to NZX today the independent directors of Prime Infrastructure Management Limited said they were considering a proposal to restructure and rename the operations of Prime Infrastructure (ASX: PIF) and expected to seek Stapled Security holder approval for the proposal at an Extraordinary General Meeting ("EGM") to be held as soon as practicable.
The proposal involves changes to existing management and corporate governance arrangements and the conversion of Prime Infrastructure into a Babcock & Brown managed and branded fund, to be called "Babcock & Brown Infrastructure".
Chairman of PIML, David Hamill, said that while the full details of the proposal were still being reviewed, the restructure is intended to present an opportunity to enhance
key management functions and further strengthen Prime Infrastructure's close relationship with Babcock & Brown.
"Based on their preliminary review, the independent directors consider the proposal is designed to ensure continuing alignment of the relationship with Babcock & Brown
and has the potential to add value to Prime Infrastructure's security holders in a number of ways" Hamill said. "It should enhance the Fund's ability to source and
secure new investment opportunities, particularly overseas where Babcock & Brown's brand recognition is significantly greater than Prime Infrastructure's."
"Babcock & Brown has demonstrated its capacity to secure and deliver growth opportunities to Prime Infrastructure. In fact, all Prime Infrastructure's acquisitions to date have been sourced by Babcock & Brown and the recent acquisition of Powerco in New Zealand also provided a clear example of the benefits of support from Babcock & Brown's strong balance sheet" Hamill said.
"The even closer alignment provided by the proposed restructure should encourage Babcock & Brown, if necessary, to undertake greater balance sheet exposure to assist in the future growth of the Fund" he added.
"At an operational level, the restructure would minimise our management expense ratio (MER) and ensure that market relationships and key management functions such as investor relations and capital management were streamlined."
Hamill said the restructure would not result in any change to the operations of Prime Infrastructure's assets, and that Prime Infrastructure would continue its strategy of asset and income stream diversification across geographical locations
and asset classes.
"Prime Infrastructure continues to be focused on the delivery of sustainable, high quality cash flows," he said. "The restructure and a closer relationship with Babcock & Brown should greatly contribute to this outcome and enable investor wealth to be maximised over the long term."
Based on preliminary advice, there will be no dilution of Stapled Security holders'interests arising from the proposed restructure, the ability to trade Stapled Securities will not be affected and Stapled Security holders will not incur any tax liability as a result of the proposed restructure.
For the restructure to proceed, Stapled Security holder approval will be required at an EGM. Details of the proposal will be included in any information to be dispatched to Stapled Security holders with the notice of EGM.
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