Macquarie Power & Infrastructure Income Fund

Macquarie Power & Infrastructure Income Fund

January 01, 2011 09:00 ET

Macquarie Power & Infrastructure Income Fund Completes Conversion To Macquarie Power and Infrastructure Corporation

TORONTO, ONTARIO--(Marketwire - Jan. 1, 2011) - Macquarie Power & Infrastructure Income Fund (TSX:MPT.UN)(TSX:MPT.DB.A) ("MPT" or the "Fund") has completed its conversion (the "Conversion") to a dividend-paying corporation named Macquarie Power and Infrastructure Corporation ("MPIC" or the "Company"). The Conversion was completed pursuant to a plan of arrangement under the Business Corporations Act (British Columbia) in accordance with the final order of the Supreme Court of British Columbia.

MPIC's common shares and 6.50% convertible debentures (the "Debentures") will trade on the Toronto Stock Exchange ("TSX") under the symbols "MPT" and "MPT.DB.A", respectively, subject to satisfaction of the customary conditions of the TSX. Holders of the Fund's trust units automatically received one common share in MPIC for each trust unit held in the Fund. The terms of the Debentures of the Fund have also automatically been amended so that the Debentures are now direct obligations of MPIC and will continue to have substantially the same terms and conditions, with the automatic adjustment that they will be convertible into MPIC common shares in accordance with their terms.

The Conversion is expected to qualify as a tax-deferred reorganization for Canadian and U.S. income tax purposes. The Company's understanding is that dividends paid in respect of MPIC common shares held by individuals resident in Canada will be eligible for a dividend tax credit under the Income Tax Act (Canada). It is intended that dividends paid to U.S. investors will be taxed for U.S. purposes as "qualified foreign dividends" to the extent that the dividends are paid out of current or accumulated earnings and profits, provided all U.S. shareholder-level requirements are met, including satisfaction of the prescribed hold periods. Investors are advised to consult their own tax advisors with respect to their own particular circumstances.

MPIC's Board of Directors has established a dividend policy to pay a monthly dividend of $0.055 per common share, or $0.66 per common share on an annualized basis. Based on the Corporation's current portfolio and outlook, this dividend level is expected to be sustainable through 2014 barring any significant unexpected events. 

About Macquarie Power and Infrastructure Corporation

Macquarie Power and Infrastructure Corporation's mandate is to invest in core infrastructure businesses in Canada and internationally. MPIC aims to acquire and actively manage a high quality portfolio of long-life infrastructure businesses that will generate sustainable, long-term distributions and an attractive total return for investors. MPIC's portfolio currently includes investments in gas cogeneration, wind, hydro and biomass power generating facilities, representing approximately 350 MW of installed capacity. MPIC is also currently developing a 20 MW solar power facility in Ontario and has entered into an agreement to acquire a 33.3% interest in a district heating portfolio in Sweden (the "DH Business"). MPIC is managed by an affiliate of Macquarie Group Limited. Please visit for additional information.

Notice to Readers

This news release is not an offer or invitation for subscription or purchase of or a recommendation of securities. It does not take into account the investment objectives, financial situation and particular needs of the investor. Before making an investment in the Company, the investor or prospective investor should consider whether such an investment is appropriate to their particular investment needs, objectives and financial circumstances and consult our investment adviser if necessary. 

None of the entities noted in this news release is an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542. Macquarie Bank Limited does not guarantee or otherwise provide assurance in respect of the obligations of these entities.

Certain of the statements contained in this news release are forward-looking and reflect management's expectations regarding the Company's future growth, results of operations, performance and business based on information currently available to the Company. Forward-looking statements are provided for the purpose of presenting information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements use forward-looking words, such as "anticipate", "continue", "could", "expect", "may", "will", "estimate", "believe" or other similar words.

The forward-looking statements in this news release are based on information currently available and what the Company currently believes are reasonable assumptions, including the material assumptions for each of the Company's assets set out in Macquarie Power & Infrastructure Income Fund's ("MPT" or the "Fund") 2009 Annual Report under the heading "Outlook" on page 42, as updated in subsequently filed Quarterly Financial Reports of the Fund (such documents are available on the Canadian Securities Administrators' System for Electronic Document Analysis and Retrieval ("SEDAR") at Other material factors or assumptions that were applied in formulating the forward-looking statements contained herein include the assumption that the business and economic conditions affecting the Company's operations will continue substantially in their current state, including, with respect to industry conditions, general levels of economic activity, regulations, weather, taxes and interest rates, that there will be no unplanned material changes to the Company's facilities, equipment or contractual arrangements, and that the acquisition of the DH Business will be completed in accordance with the terms of the acquisition agreement.

Although the Company believes that it has a reasonable basis for the expectations reflected in these forward-looking statements, actual results may differ from those suggested by the forward-looking statements for various reasons, including risks related to: power infrastructure (operational performance; power purchase agreements; fuel costs and supply; contract performance; development risk; technology risk; default under credit agreements; land tenure and related rights; regulatory regime and permits; environmental, health and safety; climate change and the environment; force majeure; the Company (tax-related risks; variability and payment of dividends, which are not guaranteed; geographic concentration and non-diversification; dependence on Macquarie Power Management Ltd. ("MPML" or the "Manager") and potential conflicts of interest; insurance; environmental, health and safety regime; availability of financing; shareholder dilution; and the unpredictability and volatility of the common shares price of the Company. There are also a number of risks related to the Company's proposed investment in the DH Business, including: general business risks inherent in the district heating business; geographic concentration; minority interest; government regulation; termination of supply and customer contracts; possible failure to complete the acquisition; enforcement of indemnities against the vendors of the DH Business; environmental health and safety liabilities; liability and insurance; and reliance on key personnel.

For a more comprehensive description of these and other possible risks, please see the MPT's Annual Information Form dated March 25, 2010 for the year ended December 31, 2009 as updated in subsequently filed Quarterly Financial Reports and other filings of MPT with the Canadian securities regulators. These filings are available on SEDAR at The assumptions, risks and uncertainties described above are not exhaustive and other events and risk factors could cause actual results to differ materially from the results and events discussed in the forward-looking statements. These forward-looking statements reflect current expectations of the Company as at the date of this news release and speak only as at the date of this news release. Except as may be required by law, the Company does not undertake any obligation to publicly update or revise any forward-looking statements.

Macquarie Power and Infrastructure Corporation is not an authorised deposit taking institution for the purposes of the Banking Act (Cth) 1959 and Macquarie Power and Infrastructure Corporation's obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL).  MBL does not guarantee or otherwise provide assurance in respect of the obligations of Macquarie Power and Infrastructure Corporation.

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