Overview of legal framework


Atlas Arteria (ALX) is a dual stapled vehicle. It was established in early February 2010 as a result of a security holder approved restructure of Macquarie Infrastructure Group (MIG). ALX was externally managed by Macquarie Fund Advisers Pty Limited until 31 March 2019 when the entity transitioned to its current management team. This followed approval by security holders to internalise management on 15 May 2018.

ALX comprises Atlas Arteria Limited (ACN 141 075 201) (ATLAX), an Australian public company, and Atlas Arteria International Limited (Registration No. 43828) (ATLIX), an exempted mutual fund company incorporated in Bermuda. ALX is listed as a stapled structure on the Australian Securities Exchange (ASX). The securities of ATLAX and ATLIX are stapled and must trade and otherwise be dealt with together.

 

Atlas Arteria Structure

ALX seeks to:

  • deliver growth in the value of the existing ALX businesses through active management of project operations to improve earnings, efficient capital management and the refinancing of project debt as suitable opportunities emerge over the medium term
  • identify and access accretive opportunities that will complement the existing portfolio.
Entity Type of Entity Asset (various % holdings) Source of Income
ATLAX   Australia public company   Dulles Greenway1   ATLAX derives its income primarily from its businesses
ATLIX   Bermudan exempted mutual fund company   APRR, Dulles Greenway2, Warnow Tunnel   ATLIX derives its income primarily from returns from its businesses

1. holds a 13.4% shareholding
2. holds a ~ 86.6% economic interest through subordinated loans.

ALX Management and Advisory Agreements

ALX was externally managed by Macquarie Fund Advisors Pty Limited (MAF) until 31 March 2019.  ATLAX and ATLIX terminated the Management/Advisory Agreements on 1 April 2019 and management of ALX transitioned to its current management team.

In accordance with the terms of the ALX Management/Advisory Agreements base fees will continue to be paid to MFA until 15 May 2019, irrespective of the earlier without cause termination.

The base management fee is calculated at 0.85% of ALX’s Market Value over the last 10 ASX trading days in the relevant quarter (excluding shares issued after 30 June 2018).

Additionally, ATLAX and ATLIX have each entered into a Transition Services Agreement with the MFA for the period from 16 May 2019 until 31 December 2019 for a monthly fee of $750,000.

Asset level management and performance fees will be payable by ALX to Macquarie from 16 May 2019 in respect of ALX’s investment in APRR.

From 16 May 2019, Macquarie will start to receive base management fees of Euro 7.4 million per annum for ongoing management of ALX’s interest in APRR. A performance fee may also be incurred, the calculation starts on 16 May 2019 and is based on an IRR achieved from an agreed valuation of APPR at that date. A performance fee equal to 15% of actual cash flows is payable when ALX’s internal rate of return exceeds 8%.

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