The last time I blogged about MIIF was more than two years ago although I would reply to readers' comments or emails about the counter from time to time since. I have a long history with MIIF. It was recommended to me by a friend and I got in at a unit price of $1.00. Yes, no kidding.
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See the elusive Mt. Fuji?
It seems that MIIF's value will elude unit holders no more. |
Through the GFC, MIIF's unit price sank and the lowest unit price I bought some at was 29.5c on 6 January 2009, if my records are accurate. I bought more over a 6 months period from then as its unit price rose to 35.5c. Coming out of the GFC, MIIF strengthened its balance sheet through certain divestments, rationalised its portfolio and concentrated on Asian assets. Its DPU also improved.
As I was convinced that S-REITs were deeply undervalued and, for me, they are also easier businesses to understand, my investment in MIIF was not nurtured further.
By middle of this year, undervalued S-REITs were hard to find except for a small window of opportunity when Saizen REIT's unit price sank 15% in May/June. As regular readers know, I was also putting money into stocks looking for possible capital gains by then since it was harder to expect that from S-REITs going into the future.
It was around the same time that I increased my investment in MIIF at 51c/unit. Relatively strong balance sheet, NAV/unit at about 70c and a DPU of 5.5c per annum. Frankly, if not for the lack of options in S-REITs, I would probably not have increased my investment in MIIF as the fund owns myriad businesses in various countries and it is not as easy to understand as the S-REITs in my portfolio.
Today, I received an email from MIIF:
The Board of Macquarie International Infrastructure Fund Limited
(MIIF) today announced the completion of the Strategic Review which was
initiated in June 2012.
The Strategic Review, which
included an assessment by CIMB Bank Berhad, Singapore Branch (CIMB) and
consultation with a cross section of shareholders, generated a number of key
observations. After considering these observations and assessing the
alternatives available to MIIF, the Board has concluded that in order to
maximise value for MIIF’s shareholders the strategy for MIIF should change.
As a result, the Board has decided to undertake
the following initiatives:
- Distribute
existing excess cash to shareholders as a one-off special
dividend;
- Commence a
joint process with Macquarie Korea Opportunities Fund (MKOF), MIIF’s TBC
co-shareholder, to realise maximum value for their investment in
TBC;
- Pursue the
orderly divestments of MIIF’s interests in HNE, CXP and Miaoli
Wind;
- Distribute
proceeds from any divestment to shareholders as soon as practicable;
and
- Allow MIIF’s
corporate-level debt facility to lapse upon maturity.
These initiatives have been formulated with a
focus on maximising and returning value to MIIF shareholders. The Board will
endeavour to execute these initiatives in a timely manner; however, these
initiatives involve complex processes which will require active management and
prudent actions to safeguard the interests of MIIF shareholders.
Good news for unitholders. Well, Mr. Market seems to like it anyway.
Related post:
MIIF: Seeing value.
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