Macquarie Atlas Roads announced that it has reached an agreement with Macquarie on the terms of the internalisation of MQA’s management.
In November last year, the MQA Boards announced that they had decided to pursue an internalisation of MQA management. Earlier this year, the MQA Boards established independent board committees (IBCs) to agree the internalisation proposal (Proposal) with Macquarie.
The MQA Board Chairs Nora Scheinkestel and Jeff Conyers said: “We are pleased to put forward this Proposal to Securityholders. We appreciate the spirit of co-operation in which Macquarie has approached these discussions and believe that this outcome is beneficial and in the best interests of MQA Securityholders. We look forward to continuing this co-operative spirit as we work towards a smooth transition to internalise MQA’s management.”
The key terms of the Proposal are as follows:
- There will be no consideration paid to Macquarie for terminating the MQA management agreements.
- Macquarie will remain as the manager of MQA for a further 12 month period from this year’s AGM on 15 May 2018. During this period, base management fees will be paid to Macquarie at the current rate of 0.85% of MQA’s market value (excluding any shares issued after 30 June 2018).
- In the meantime, the MQA Boards will appoint a new chief executive who will in turn recruit a new management team and establish the necessary infrastructure, systems and processes in order for MQA to manage its own operations independently and separately from Macquarie.
- From the date of termination of the MQA management agreements Macquarie will provide specific transition services for approximately a further 6 months for a fee of $750,000 per month.
- The terms of the existing MQA management agreements will apply to the payment of performance fees, on the basis that the MQA management agreements are treated for this purpose as being terminated on 1 July 2018. This means that:
- a final performance fee will be calculated for the year ending 30 June 2018 and, if earned, will be paid in full at that time;
- the third instalment of the 2016 performance fee and the second instalment of the 2017 performance fee will continue to be subject to their respective performance hurdles which, in accordance with the current agreement, will be tested on 30 June 2018; and
- as a result of the termination of the MQA management agreements being no later than 15 May 2019, the third instalment of the 2017 performance fee will become payable without further performance testing.
- As a result of the termination of the MQA management agreements, Macquarie will start to receive fees for the ongoing management of MQA’s interest in APRR from 16 May 2019
- MQA will change its name to Atlas Arteria and its ASX ticker code to ALX.
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