June 29, 2006 - TanQuid, a wholly owned subsidiary of MIIF, has agreed to acquire a portfolio of oil and chemical tank storage facilities from Petroplus International B.V. .
TanQuid is the largest independent tank storage business in Germany.
The acquired portfolio consists of eight tank storage sites located primarily in the key industrial region of the Ruhr-Rhine in western Germany. All sites are located with access to a variety of transport links, providing a unique strategic advantage over other storage facilities.
The purchase price is 33 million (S$65m), with equity commitment from MIIF of 13.2 million (S$26m) to be funded from existing MIIF standby debt facilities. MIIF forecasts that the business will generate a growing five year average cash yield in excess of 12%, and an accretive internal rate of return.
TanQuid now comprises approximately 9.3%1 of MIIFs diverse infrastructure portfolio. Following the acquisition, TanQuid will operate oil and chemical storage tanks at 18 sites in Germany, consolidating its position as Germany’s largest independent tank storage business, with market share increasing from 22% to 25%. The management team of the acquired sites will also be integrated into TanQuid, and bring with them their portfolio of unique clients.
Mr Gregory Osborne, the Managing Director of MIIFs Manager, said “This acquisition demonstrates MIIFs commitment to sourcing and securing consolidation opportunities for our existing assets that further strengthen their cash generating ability, and provide even more growth in future cash flows.”
This is an extremely attractive investment for TanQuid. The sites generate stable and predictable revenues, a significant portion of which are backed by long-term, government contracts. There is also a substantial portion of long-term higher margin non-government contracts in the revenue base. The customer mix produces yields that are very attractive for MIIF, and will be accretive to the overall equity returns from TanQuid. “We are very pleased to have secured this asset and now look forward to the extra value it will generate for MIIF shareholders. MIIFs current dividend guidance of 7.952 cents per share for 2006 represents a trading yield of 9.3%3, which will be tax free in the hands of most Singapore resident investors. Acquisitions such as this provide an excellent platform for growing dividend payments to our shareholders in the future,” Mr Osborne said. Completion is expected to occur by the end of July 2006, following the satisfaction of certain conditions including merger clearance.
