Economy
Airport investment writedown
RETIREMENT Benefits Fund superannuation investors are yet to receive a dividend from their $100 million investment in the Hobart International Airport.
Despite a 4 per cent increase in passenger numbers last year, the latest RBF member report reveals its airport investment has been written down by $5.1 million to $94.7 million in 2008-09.
High costs of finance during the global financial crisis crippled the result for the RBF and its partner the Macquarie Global Infrastructure Fund III.
However, while RBF has missed out the Macquarie Group has received $2.8 million in administration fees over 18 months for overseeing the web of companies involved in the airport investment.
The Launceston City Council received a $504,324 dividend in 2009 for its 10 per cent investment in the Launceston Airport.
RBF (49.9 per cent) and Macquarie GIF (50.1 per cent) invested $200 million in Tasmanian Gateway Holdings Corporation to buy the airport from TasPorts in November 2007.
A subsidiary of TGHC, Tasmanian Gateway Corporation, then borrowed $173.7 million from banks to complete the airport purchase for $350.5 million.
No dividend was paid in 2008 or 2009 to the RBF investors.
Exclusively, earlier on Tasmanian Times:
Hobart Airport – the full monty (06 April 2009): HERE“>HERE
What’s changed Mr Aird? (22 Nov 2008): HERE“>HERE
The scandal of Hobart airport (21 Nov 2008): HERE“>HERE
The third and final link includes links from an earlier (but perspicacious) Tasmanian Times piece by Bob McMahon. He asked Retirement Benefits Fund’s CEO, Simon Gillies, a series of questions about their investment in the airport.
An excerpt:
6. Given the Hobart Airport’s low revenue and profit levels how does this justify the high purchase price?
SIMON GILLIES: As trustees of the Retirement Benefits Fund, the Board has an obligation to ensure that the Board’s functions and powers are performed and exercised in the best interests of the beneficiaries and, in respect of the RBF Contributory Scheme, having regard to the interests of the State. The Board has made this investment after due diligence processes that utilised expert assessment. The Macquarie Group is considered to be the world’s leading value-adding airport infrastructure manager and investor. The Board has been working alongside Macquarie Group for many months conducting detailed due diligence on valuations of similar global assets. The Board has confidence in its bid strategy as a co-investor and believes that the asset has strong long term portfolio returns and that its sound cash flow positioning compliments (sic) other high quality assets in the Board’s portfolio.