MAp flies the coop as Macquarie transforms its airport model


The entire Macquarie Bank management strategy is changing, as the Bank seeks to retire debt and reverses away from the trust and management-fee driven model which it perfected during the good times. Macquarie today announced that Macquarie Airports, MAp, was to be “internalised”. That is, it will become a standalone operation, acquiring the two Australian trusts which are part of the MAp stapled structure, as well as terminating the European Macquarie Capital Funds agreement with Macquarie Airports Limited.

Reducing debt; now a sell-down?

The formal reason given is that this will “address the gap between the MAp security price and the value of MAp’s airports”. The announcement today talked of progressing “a number of initiatives” and that the internalisation “is an important further step towards reducing that gap”.

It is no secret that sell-down of Macquarie’s interests in the airport sector is a likelihood; the group has significant holdings in Sydney, Bristol, Brussels and Copenhagen Airports, all of which are under some stress as airlines cut back on services – although these are generally performing as well as most.

A lucrative source of revenue to end

Since Macquarie got involved in the sector in 2002, “base management fees” have averaged AUD44.1 million per annum and “performance fees” an additional AUD255.5 million.

MAp CEO Kerrie Mather is to remain in her position under the new arrangement. She stressed that MAp is “in a sound financial position”.

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