MACQUARIE AIRPORTS PROSPECTUS

Transcription

1 A non-renounceable Priority Entitlement Offer of 375 million Fully Paid Securities at an Issue Price of $1.50 per Fully Paid Security and an Institutional Placement of approximately 54 million Fully Paid Securities at an Issue Price of $1.53 per Fully Paid Security to raise $645 million. A placement of 12.5 million Fully Paid Securities to Macquarie Bank Limited at $2.00 per Fully Paid Security to raise $25 million. MACQUARIE AIRPORTS PROSPECTUS Sydney Kingsford Smith Airport Aeroporti di Roma

2 Special Notice Investments in Macquarie Airports ( MAp ) are not deposits with or other liabilities of Macquarie Bank Limited ACN ( Macquarie ) or of any entity in the Macquarie Bank Group and are subject to investment risk, including possible delays in repayment and loss of income and capital invested. Macquarie Airports Holdings (Bermuda) Limited ( MAHBL ) (which is not a member of the Macquarie Bank Group) nor any member of the Macquarie Bank Group including Macquarie Airports Management Limited ( Macquarie Airports Management ) and Macquarie Investment Management (UK) Limited ( MIMUK ) guarantees any particular rate of return on Securities (including Fully Paid Securities) or the performance of MAp, nor do they guarantee the repayment of capital from MAp. This offer does not take into account the investment objectives, financial situation and particular needs of the investor. Before making an investment in MAp, the investor or prospective investor should consider whether such an investment is appropriate to their particular investment needs, objectives and financial circumstances and consult an investment adviser if necessary. This document is important and requires your immediate attention. It should be read in its entirety. If you are in doubt as to the course you should follow, you should consult your stockbroker, solicitor, accountant or other professional adviser without delay. This Prospectus dated 18 July 2002, was lodged with the Australian Securities & Investments Commission ( ASIC ) on that day. ASIC and the Australian Stock Exchange Limited ( ASX ) take no responsibility for the contents of this Prospectus. No Fully Paid Securities will be allotted or issued on the basis of this Prospectus later than 13 months after the date of this Prospectus. No person is authorised to give any information or to make any representation in connection with the Priority Entitlement Offer described in this Prospectus which is not contained in this Prospectus. Any information or representation not so contained may not be relied on as having been authorised by MAHBL or Macquarie Airports Management in connection with the Priority Entitlement Offer. The distribution of this Prospectus in jurisdictions outside Australia and New Zealand may be restricted by law and persons who come into possession of it should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. This Prospectus does not constitute an offer in any jurisdiction in which, or to any person to whom it would not be lawful to make such an offer. The Securities have not been and will not be, registered under the US Securities Act of 1933 and may not be offered or sold in the United States or to, or for the account or benefit of a US person (as defined in Regulation S under the Securities Act). No prospectus has been filed with the Registrar of Companies pursuant to the Public Offers of Securities Regulations 1995 on the grounds that the Securities are not being offered or sold to the public in the UK as a result of the Securities being offered to no more than fifty (50) persons in the UK. Additionally, the content of this Prospectus has not been approved by an authorised person in the UK and accordingly it may not be communicated to any person in the UK unless that person is of a kind described in Article 19 of Article 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 or is a person to whom this Prospectus may otherwise be lawfully communicated. The communication of this Prospectus to any other person in the UK is unauthorised and may contravene the Financial Services and Markets Act This document has not been registered with the Registrar of Companies in Hong Kong. Accordingly, the document may not be circulated or distributed in Hong Kong to any person other than a person who is a Security Holder as at the Record Date. Nor may any of the Securities be offered or sold in Hong Kong by means of this document or any other document, other than to persons whose ordinary business it is to buy or sell shares or debentures, whether as principal or agent, or in other circumstances which do not constitute an offer or sale of the Securities to the public in Hong Kong. Macquarie Airports Management, as responsible entity of the trusts comprised in MAp, and MIMUK, as adviser to MAHBL, are entitled to fees for so acting. Macquarie and its related corporations (including Macquarie Airports Management and MIMUK) together with their officers and directors may hold Securities in MAp from time to time. Exposure Period The Corporations Act prohibits the processing of Applications in the seven day period after the date of lodgement of the Prospectus. This period may be extended by ASIC by up to a further seven days. This period is an exposure period to enable the Prospectus to be examined by market participants prior to the raising of funds. Applications received during the exposure period will not be processed until after the expiry of that period. No preference will be conferred on Applications received during the exposure period. Electronic Prospectus This Prospectus may be viewed online at Applicants under the Public Offer using the Application Form attached to the electronic version of this Prospectus must be located in Australia. Persons who receive the electronic version of this Prospectus should ensure that they download and read the entire Prospectus. A paper copy of this Prospectus will be provided free of charge to any person who requests a copy by contacting Macquarie Airports Management or the Underwriters, by mail or in person, during the period of the Offer. Definitions A number of words and terms used in this Prospectus have defined meanings that appear in Section 15, Glossary. Financial Amounts All financial amounts contained in this Prospectus are expressed in Australian dollars unless otherwise stated. Where amounts in euros have been converted into Australian dollars, an A$/ exchange rate of 0.57 has been used. Where amounts in pound sterling have been converted into Australian dollars, an A$/ exchange rate of 0.37 has been used. These exchange rates were current as at 5 July Photographs and Diagrams The assets depicted in photographs in this Prospectus are not necessarily assets of MAp. Diagrams used in this Prospectus are illustrative only and may not be drawn to scale. Privacy The Application Form and Priority Entitlement Form accompanying this Prospectus require you to provide information that may be personal information for the purposes of the Privacy Act 1988 (as amended). MAp (and the Registry on its behalf) collects, holds and uses that personal information in order to assess your application, service your needs as an investor, provide facilities and services that you request and carry out appropriate administration. The information may also be used from time to time to inform you about other Macquarie Bank Group products or services which MAp considers may be of interest to you. If you do not want your information used for this purpose, please indicate so on the Priority Entitlement Form or Application Form. Access to information may also be provided to other Macquarie Bank Group companies and to MAp s agents and service providers on the basis that they deal with such information in accordance with MAp s privacy policy. If you do not provide the information requested of you in the Application Form and Priority Entitlement Form, Computershare will not be able to process your application for Fully Paid Securities or administer your holding of Securities appropriately. Under the Privacy Act 1988 (as amended), you may request access to your personal information held by (or on behalf of) MAp. You can request access to your personal information by telephoning or writing to the Registry as follows: Computershare Investor Services Pty Limited 60 Carrington Street Sydney NSW 2000 Telephone: MAp has adopted the Macquarie privacy policy. You can obtain a copy of that policy by visiting the Macquarie website at Underwriters This Offer (other than the Macquarie Placement) has been fully underwritten by the Joint Lead Managers, Macquarie Equity Capital Markets Limited and UBS Warburg Australia Limited.

3 In the three months since listing on ASX, MAp has acquired a significant interest in Sydney Airport and has agreed to acquire a significant interest in Rome Airport CONTENTS Summary 2 Investment Highlights 3 Chairman s Letter Overview of the Offer Overview of MAp Details of the Sydney Acquisition Details of the Rome Acquisition Industry Overview Board and Management Financial Information Risks MAp, Sydney and Rome Financial Structure and Taxation Summary Independent Expert Reports Independent Expert Financial Reports Material Contracts Additional Information Management Fee Examples Glossary 217 Application Forms 224 Corporate Directory Prospectus 1

4 Summary Summary of the Priority Entitlement Offer, Institutional Placement and the Macquarie Placement Issue Price for the Priority Entitlement Offer 1 Issue Price for the Institutional Placement Issue Price for the Macquarie Placement Eligible Security Holder Priority Entitlement Amount to be raised by the Priority Entitlement Offer Amount to be raised by the Institutional Placement Amount to be raised by the Macquarie Placement Total Offer proceeds $1.50 per Fully Paid Security $1.53 per Fully Paid Security $2.00 per Fully Paid Security Three Fully Paid Securities for every Four Partly Paid Securities held $562.5 million $82.5 million $25 million $670 million 1 Investors should note that Fully Paid Securities issued under this Prospectus are fully paid. Securities issued under the IPO Prospectus dated 4 March 2002 ( Partly Paid Securities ) are partly paid to $1.00 with the Final Instalment of $1.00 per Security payable on 1 October 2002, at which time the Securities will be fully paid and rank equally in all respects with Fully Paid Securities. Summary of Key Dates Record Date to Determine Priority Entitlement to Fully Paid Securities Wednesday 17 July 2002 Latest Time for Receipt of Priority Entitlement Forms and Payment in Full for Initial Allocation Tuesday 6 August 2002, 5.00 pm (AEST) Allotment of Fully Paid Securities under Initial Allocation Tuesday 13 August 2002 Quotation of Fully Paid Securities under Initial Allocation Wednesday 14 August 2002 Latest Time for Receipt of Priority Entitlement and Application Forms and Payment in Full for Final Allocation Tuesday 27 August 2002, 5.00 pm (AEST) Allotment of Fully Paid Securities under Final Allocation Thursday 5 September 2002 Quotation of Fully Paid Securities under Final Allocation Friday 6 September 2002 These dates are indicative only and are subject to change. MAp reserves the right to amend this indicative timetable. MAp reserves the right, subject to the Corporations Act and the Listing Rules, to extend the latest date for receipt of Priority Entitlement and Application Forms or to cancel the Priority Entitlement Offer without prior notice. Priority Entitlement and Application Forms must be received by that time by Computershare Investor Services ( Registry ), together with a cheque or bank draft in Australian currency for the amount of the application money, payable to Trust Company of Australia Ltd ACF MAp Group Subscriptions Account and crossed Not Negotiable. A loose leaf Priority Entitlement Form is enclosed with copies of this Prospectus sent to Eligible Security Holders. Defined terms and abbreviations included in the text of this Prospectus are explained in the Glossary at the back of this Prospectus. Questions relating to the Priority Entitlement Offer can be directed to MAp s Investor Relations Team on , the Joint Lead Managers, your stockbroker or other financial adviser. Questions relating to any aspect of your individual holding in MAp should be directed to MAp s registry, Computershare Investor Services on Eligible Security Holders have the opportunity to apply for Fully Paid Securities by one of two dates. Applicants who apply for Fully Paid Securities by 6 August 2002 will have their securities allotted by 13 August and will be able to trade those securities on ASX from 14 August 2002 (the Initial Allocation ). Eligible Security Holders and Applicants who apply for Fully Paid Securities by the later date of 27 August 2002 will have their securities allotted by 5 September 2002 and will be able to trade those securities on ASX from 6 September 2002 (the Final Allocation ). From 1950 to 2001 global airline traffic growth

5 Macquarie Airports MAp Investment Highlights MAp MAp offers investors exposure to the dynamic global airport sector Airport and Management Expertise MAp has access to a highly experienced team of executive staff. The majority of the team has at least 10 years of experience (and some have over 20 years) of direct airport management and airport business planning at major international airports such as Heathrow, Gatwick, Schiphol, Rome, Sydney, Melbourne, Barcelona, Athens and Berlin. This team has advised airport purchasers, owners and operators in over 30 countries including the UK, the US, Australia, New Zealand, South Africa, Canada, Poland, Germany, the Netherlands, Italy, Portugal, Spain, Greece and Indonesia. has averaged 9.8% per annum.

6 Macquarie Airports Sydney Airport Investment Highlights Sydney MAp acquired a total beneficial interest of 44.7 per cent in Sydney Airport for $903 million on 28 June Purchase Price Sydney Airport s Enterprise Value* implied by the purchase price is 14.3 times the forecast EBITDA for the year ending 30 June Sydney Airport is the only international airport and the major domestic airport servicing Sydney and the state of New South Wales. Sydney Airport accounts for approximately 50 per cent of Australia s international traffic. *See Glossary for definition. Sydney Airport handled over 26 million passengers in Prospectus Macquarie Airports

7 Investment Highlights Sydney Airport services approximately50%of international traffic to and from Australia. Primary Gateway to Australia Macquarie Airports Prospectus 5

8 Investment Highlights Sydney Airports Corporation undertook a major expansion and refurbishment of its international terminal, taxiways and aprons and retail space in preparation for the Sydney 2000 Olympic Games, at a cost of approximately $640 million. The high quality of the resulting facilities is demonstrated by Sydney Airport s industry awards and its ranking in international passenger opinion surveys. High Quality Assets International traffic growth averaged 7.0% per annum 6 Prospectus Macquarie Airports

9 Investment Highlights Strong and Stable Passenger Growth Over the 16 calendar years from 1985 to 2001 international traffic growth at Sydney Airport averaged 7.0 per cent per annum. Domestic traffic growth at Sydney Airport has averaged 6.2 per cent per annum over the same period. Sydney is a leading tourist destination and features in six of the top 10 international routes from Australia. Sydney Airport is exposed to relatively strong long term regional GDP growth, a major driver of traffic growth. from 1985 to 2001 Significant Shareholder Rights MAp, together with other Macquarie managed entities, has the ability to appoint up to five directors (out of a maximum of 10) to the board of Southern Cross Holdings, the owner of Sydney Airport, and is entitled to nominate two members (out of a maximum of seven) to the Sydney Airport strategy committee. Helen Nugent, the Chairman of MAp, has been appointed Chairman of Sydney Airports Corporation. Macquarie Airports Prospectus 7

10 Investment Highlights There are a number of growth opportunities at Sydney Airport such as the further development of retailing, the provision of additional car parking products, the implementation of a focused approach to property development within operational constraints and the potential to significantly increase operating efficiencies. Significant Potential Upside From 1 July 2002, Sydney Airport is free to set its own aeronautical prices, subject to contractual constraints, price monitoring by the ACCC and compliance with normal competition and consumer legislation. This provides the opportunity to further develop a business partnership approach with the airlines using the airport which is expected to be mutually beneficial. Light Handed Regulation 8 Prospectus Macquarie Airports

11 Investment Highlights Strong operational track record The current management team of Sydney Airport has a strong operational track record as evidenced by its successful redevelopment of the international terminal, management of the Sydney 2000 Olympic Games traffic, effective handling of regulatory changes, the management of the impact of September 11, 2001 and the financial collapse of Ansett. Experienced Management Team Macquarie Airports Prospectus 9

12 Macquarie Airports Rome Airport Investment Highlights Rome Unique opportunity MAp has agreed to acquire a total beneficial interest of 28.0 per cent in Aeroporti di Roma S.p.A. ( AdR ) for $542 million (including acquisition transaction costs). AdR owns Rome Airport. Purchase Price AdR s Enterprise Value* implied by the purchase price is 9.6 times the forecast EBITDA for the year ending 31 December Primary Gateway to Italy More than 26million passengers in *See Glossary for definition. 10 Prospectus Macquarie Airports

13 Investment Highlights AdR will enhance MAp s geographical diversity AdR is the concessionaire for Fiumicino and Ciampino airports which together comprise Rome Airport. Rome Airport is the primary gateway to Italy and is Europe s sixth largest airport system, handling 26.3 million passengers in Commercial Upside Retail spend per passenger is approximately 50 per cent lower at Fiumicino than comparable European airports such as Gatwick, Heathrow, Charles de Gaulle and Schiphol. MIMUK believes that the implementation of a revised retail business plan can bring passenger spend rates into line with comparable European airports over the medium to long term. Macquarie Airports Prospectus 11

14 Investment Highlights Growth Asset According to World Bank data, in 1998, the propensity to fly in Italy was significantly lower than the average trips per head of population for other major European countries. MIMUK believes that as the Italian aviation industry develops there is significant potential for traffic growth in Italy as the propensity to fly moves closer to the European average. Rome is a leading international Large and Attractive Catchment Area Fiumicino and Ciampino airports are the only commercial airports serving Rome. The immediate Rome catchment area has a population of approximately 5.2 million. Rome is the political, historic and religious capital of Italy as well as a leading international tourist destination. 12 Prospectus Macquarie Airports

15 Investment Highlights Low cost airlines Ciampino is developing as a low cost airline base for Go and Ryanair, with Ryanair introducing new routes and frequencies at this airport. MIMUK believes that this has the potential to significantly increase traffic at this airport. tourist destination. As the largest single beneficial shareholder in AdR, MAp will have the opportunity to contribute to key strategic, commercial, operational and financial decisions through representation (through MALSA) on the board of AdR. Strategic Influence Macquarie Airports Prospectus 13

16 Investment Highlights Capacity for growth Three terminals at Fiumicino have been upgraded within the last five years. Capacity has been created for throughput of approximately 37 million passengers per year, 45 per cent above 2001 passenger throughput. 14 Prospectus Macquarie Airports

17 Macquarie Airports Chairman s Letter 18 July 2002 Dear Investor, At the time of listing, MAp owned an initial investment in Macquarie Airports Group Limited ( MAG ) which owned interests in Bristol and Birmingham airports in the UK. The board of Macquarie Airports Management Limited ( MAML ) stated in the IPO Prospectus that it would seek to make further acquisitions in order to meet MAp s objective of investing in a worldwide portfolio of airports. Since listing MAp has been successful in securing two exciting investments, namely interests in Sydney and Rome airports. These acquisitions represent a significant development for MAp. Both acquisitions have been secured at prices which compare favourably with other recent airport sales and MAp has been able to secure significant interests in both airports. On 25 June 2002, the Australian Commonwealth Government announced that the Southern Cross Consortium was successful in its bid for Sydney Airport. As a member of the Southern Cross Consortium, MAp has acquired a 40.4 per cent stake in Sydney Airport for $815 million. MAp has acquired a further 4.3 per cent indirect interest in Sydney Airport through its investment in MAG. MAp s total beneficial interest in Sydney Airport is 44.7 per cent. As the major international gateway into Australia, Sydney Airport is Australia s busiest passenger airport, with a share of around 50 per cent of Australia s international traffic and around 26 per cent of Australia s domestic traffic. On 16 July 2002, MAp announced it had entered into a conditional agreement to acquire an interest of 19.8 per cent in AdR (the concessionaire of Rome Airport) for $382 million (including acquisition transaction costs). MAp will also acquire an 8.2 per cent indirect interest in AdR through its investment in MAG. On completion, MAp s total beneficial interest in AdR will be 28.0 per cent. Rome Airport is the largest airport system in Italy, handling around 30 per cent of Italy s international traffic and around 28 per cent of Italy s domestic traffic. Rome Airport is the sixth largest airport system in Europe. To fund these acquisitions and to repay short term borrowings, MAp proposes to raise $670 million pursuant to this Prospectus. Under the Priority Entitlement Offer, Security Holders will be able to purchase three additional MAp Fully Paid Securities for every four MAp Partly Paid Securities held at the Record Date, at a price of $1.50 per Fully Paid Security. Macquarie Bank Limited has agreed to subscribe for 12.5 million Fully Paid Securities at an issue price of $2.00 per Security (a premium of 50 cents per Fully Paid Security to the Issue Price), amounting to $25 million. A further 53.9 million Fully Paid Securities will be allocated to institutional investors at the Issue Price of $1.53. Macquarie Equity Capital Markets Limited and UBS Warburg Australia Limited have fully underwritten the Priority Entitlement Offer and the Institutional Placement. The Final Instalment of $1.00 for each Security purchased as part of MAp s IPO in April this year (which amounts to an additional $500 million), is payable on 1 October This will be used to repay MAp s remaining short term borrowings. Following this capital raising, MAp s focus will be on consolidating the benefits from these recent acquisitions. The board of MAp is not currently considering any further acquisitions or capital raisings. Further details of the Offer, Sydney Airport and Rome Airport are contained in this Prospectus. I encourage you to read this Prospectus carefully. I commend this Offer to you and thank you for your continued support. Yours faithfully Helen Nugent Chairman MACQUARIE AIRPORTS MANAGEMENT LIMITED Macquarie Airports Prospectus 15

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19 Macquarie Airports Section 1 Overview of the Offer 1

20 Macquarie Airports Section 1 Overview of the Offer 1.1 The Acquisitions Sydney Acquisition Percentage Interest $ million MAp s interest 40.4% 815 MAp s indirect interest through MAG 4.3% 88 Total beneficial MAp interest in Southern Cross Holdings 44.7% 903 Rome Acquisition MAp s interest (including acquisition transaction costs) 19.8% 382 MAp s indirect interest through MAG 8.2% 160 Total beneficial MAp interest in AdR (on completion of acquisition) 28.0% 542 Total Cost 1,445 Acquisition of Sydney Airport On 25 June 2002, the Commonwealth Government announced that the Southern Cross Consortium was successful in its bid for Sydney Airport via the acquisition of all the shares in Sydney Airports Corporation. As a member of the Southern Cross Consortium, MAp has acquired 40.4 per cent of the Ordinary Equity in Sydney Airport through a special purpose vehicle Southern Cross Australian Airports Trust ( SCAAT ) for $815 million (the Sydney Acquisition ). The Sydney Acquisition was completed on 28 June Sydney Airport s Enterprise Value* implied by the purchase price is 14.3 times the forecast EBITDA for the year ending 30 June Through its MAG shareholding MAp has also acquired a 4.3 per cent indirect interest in Sydney Airport for $88 million. MAp s total beneficial interest in Sydney Airport is therefore 44.7 per cent. See Section 3 for further details on the Sydney Acquisition and Sydney Airport. *See Glossary for definition. Acquisition of Rome Airport On 16 July 2002, MAp announced it had entered into a conditional agreement with MAG and GIF to acquire a 44.7 per cent shareholding in AdR for consideration of approximately $842 million (excluding acquisition transaction costs) through a special purpose vehicle, Macquarie Airports Luxembourg S.A. ( MALSA ) (the Rome Acquisition ). MAp will acquire a 44.3 per cent shareholding in MALSA for $382 million (including acquisition transaction costs), representing a direct interest in AdR of 19.8 per cent. In addition, MAG will acquire a 50.1 per cent shareholding in MALSA representing a direct interest in AdR of 22.4 per cent. GIF will acquire the balance of shares in MALSA. Through its MAG shareholding, MAp will also acquire an additional 8.2 per cent indirect interest in AdR. MAp s total beneficial interest in AdR is therefore 28.0 per cent. AdR s Enterprise Value* implied by the purchase price is 9.6 times the forecast EBITDA for the year ending 31 December Additionally, MAp also has a right of first refusal to purchase a further $10 million interest in AdR, should it be sold by GIF. AdR holds the concessions until 2044 to operate, maintain, manage and develop the two airports that together comprise Rome Airport: Leonardo da Vinci Airport at Fiumicino in Rome ( Fiumicino ) Rome s principal airport with throughput of 25.6 million passengers in Fiumicino is located approximately 30 kilometres from the city centre of Rome and has four runways and three terminals; and G.B. Pastine Airport at Ciampino in Rome ( Ciampino ) Rome s second airport with throughput of 0.7 million passengers in Ciampino is situated 15 kilometres from the city centre of Rome and has one runway and a single commercial terminal. 18 Prospectus Macquarie Airports

21 AdR is currently 95.9 per cent owned by Leonardo Holding S.A. ( Leonardo ) and 4.1 per cent by four local authorities in the Lazio region and other holders. Leonardo is owned by four Italian industrial companies: Gemina S.p.A. (42 per cent), Falck S.p.A. (31 per cent), Compagnia Italpetroli S.p.A. (16 per cent) and Impregilo S.p.A. (11 per cent). On completion of the Rome Acquisition, Leonardo will hold a 51.2 per cent interest in AdR and MAG, MAp and other co-investors (through MALSA) will hold 44.7 per cent. The remaining 4.1 per cent will continue to be held by four local authorities in the Lazio region and other holders. See Section 4 for further details regarding the Rome Acquisition and AdR. 1.2 MAp s Airport Acquisitions The chart below shows the Enterprise Value to EBITDA multiples for MAp s airport investments. The weighted average Enterprise Value to EBITDA multiple for MAp s portfolio of acquisitions is 12.4 times. Calculation of Multiples The weighted average Enterprise Value to EBITDA acquisition multiple for MAp s portfolio is calculated based on the percentage of MAp s portfolio (both direct and indirect interests) held in Sydney, Rome, Bristol and Birmingham airports respectively. The Enterprise Value to EBITDA multiples shown in the above chart are calculated based on the Enterprise Values* at the date of each acquisition and the following EBITDA figures: for Sydney Airport forecast EBITDA for the year ending 30 June 2003 as described in Section 3 of this Prospectus; for Bristol and Birmingham airports actual EBITDA results for the year ended 31 March 2002; and for AdR forecast EBITDA for the year ending 31 December 2003 as described in Section 4 of this Prospectus. Enterprise Value to EBITDA multiple * See Glossary for the definition of Enterprise Value, Sydney Enterprise Value and AdR Enterprise Value. 0 Sydney (2002) Bristol (2001) Birmingham (2001) Rome (2002) Airport and Year of Acquisition Macquarie Airports Prospectus 19

22 1.3 Funding of the Acquisitions The Sydney Acquisition has been funded by available cash, short term borrowings against MAp s Final Instalment of $500 million which is due on 1 October 2002 and a Letter of Credit provided by Macquarie. The Rome Acquisition will be funded by this Offer. Funds raised by the Offer meet all of MAp s current investment requirements. No further investments or capital raisings are currently being contemplated by MAp. Sources and Applications of Funds $ million Sources of Funds Priority Entitlement Offer 563 Institutional Placement 82 Macquarie Placement 25 Final Instalment Bridging Facility 500 Letter of Credit 130 Cash on hand 341 Total 1,641 Applications of Funds Sydney Airport MAp s direct interest in Southern Cross Holdings 815 MAp s indirect interest in Southern Cross Holdings through MAG 88 Rome Airport MAp s direct interest in MALSA (including acquisition transaction costs) 382 MAp s indirect interest in MALSA through MAG 160 Working Capital 41 Net borrowing and other costs to 30 June Expenses of the Offer 20 Repayment of Borrowings 130 Total 1, The Offer This Prospectus relates to the Macquarie Placement, an Institutional Placement and Priority Entitlement Offer and Public Offer to raise up to $670 million. This Offer (other than the Macquarie Placement) has been fully underwritten by Macquarie Equity Capital Markets Limited and UBS Warburg Australia Limited to $645 million. Macquarie Placement MAp has agreed to issue 12.5 million Fully Paid Securities at an Issue Price of $2.00 per Fully Paid Security to Macquarie Bank Limited (the Macquarie Placement ). This represents a 50 cent per Fully Paid Security premium to the Issue Price. The Macquarie Placement will be completed subject to Security Holder approval to be sought at an Extraordinary General Meeting. These Fully Paid Securities will be issued pursuant to this Prospectus. Institutional Placement MAp has agreed to issue approximately 54 million Fully Paid Securities to institutional investors at an Issue Price of $1.53 per Fully Paid Security, to raise a total of $82 million. These Fully Paid Securities will be issued pursuant to this Prospectus, and will be allotted at the Initial Allocation. Priority Entitlement Offer This Prospectus also relates to the Priority Entitlement Offer in which MAp is making an offer of up to 375 million Fully Paid Securities to Security Holders at a price of $1.50 per Fully Paid Security to raise up to $563 million. Certain institutional Security Holders have been invited to make an irrevocable offer to apply for their pro-rata entitlements under the Priority Entitlement Offer. Those institutional Security Holders and other institutional investors have also been invited to make irrevocable offers to apply for any Fully Paid Securities not taken 20 Prospectus Macquarie Airports

23 Section 1 Overview of the Offer up by those institutional Security Holders entitled to them. These offers will be dealt with separately and Fully Paid Securities will be allotted to these institutional Security Holders and other institutional investors at the Initial Allocation. All other Security Holders wishing to invest will need to complete the Priority Entitlement Forms accompanying this Prospectus. Eligible Security Holders who are registered holders as at 5.00 pm (AEST) on Wednesday 17 July 2002 will receive an entitlement allocation under this Prospectus. Your entitlement allocation is non-renounceable and cannot be transferred and is based on your Security holding as at the Record Date. Your pro-rata entitlement equates to three Fully Paid Securities for every four Partly Paid Securities you held at the Record Date. In calculating entitlements to Fully Paid Securities, fractional entitlements have been rounded to the nearest whole number of Fully Paid Securities. A detailed timetable for the Priority Entitlement Offer is set out at the front of this Prospectus. Investors should be aware that the final closing date and time for the Registry to receive Applications is 5.00 pm (AEST) on Tuesday 27 August 2002 (subject to variation). Public Offer This Prospectus also relates to a general offer of the Fully Paid Securities which are not subscribed for by Eligible Security Holders or institutional investors under the Priority Entitlement Offer (the Public Offer ). Applications for the Public Offer can only be satisfied to the extent that there is a shortfall in subscription of the Priority Entitlement Offer, and no additional Securities will be made available for public applicants. The Public Offer is made only to residents of Australia. Timetables, restrictions on issue and other relevant provisions of this Prospectus regarding the Offer also apply to the Public Offer. 1.5 Fully Paid Securities Securities issued under this Prospectus will be fully paid. Partly Paid Securities are partly paid to $1.00 with a Final Instalment of $1.00 per Partly Paid Security payable on 1 October Until the Final Instalment is paid, Fully Paid Securities will trade as a separate class of securities on ASX. When the Final Instalment is paid, all Securities will be fully paid and will trade as a single class. Partly Paid Securities and Fully Paid Securities will rank equally in all respects with regard to the rights attaching to these securities, however rights will be pro-rata to the percentage paid up value of the securities. 1.6 The Final Instalment on Partly Paid Securities Security Holders who are registered as the holders of the Partly Paid Securities on the Final Instalment Record Date will be required to pay the Final Instalment of $1.00 per Security by 1 October 2002, subject to MAp s right to defer or cancel the Final Instalment. As detailed in the IPO Prospectus, if Security Holders do not pay the amount of the Final Instalment, MAp may take action to recover the amounts owing. While amounts are outstanding, voting and distribution rights may be suspended. MAp may also forfeit and resell the relevant Partly Paid Securities, in which case Security Holders will be liable for the amount outstanding plus interest (calculated from 1 October 2002) as well as the costs and expenses associated with the forfeiture and disposal. If a Security is forfeited, any unpaid distributions will also be forfeited. MAp may apply any proceeds from the resale of Partly Paid Securities to pay up the amount of the Final Instalment. Macquarie Airports Prospectus 21

24 Section 1 Overview of the Offer 1.7 Distributions to Security Holders Distribution Policy Distributions to Security Holders will be payable half yearly in arrears in February and August in respect of the preceding six month periods ending 31 December and 30 June. Macquarie Airports Management is required under the Trust Deed of MAT1 to distribute at least the taxable income of MAT1 to Security Holders each year. MAT1 will distribute all of its taxable income in respect of each six month period. The distribution policy for MAT2 and MAHBL will be determined by Macquarie Airports Management and the directors of MAHBL respectively each year. Forecast Distributions Securities issued under this Offer will not participate in the June 2002 distribution, but will participate in full in the December 2002 distribution. Macquarie Airports Management and MAHBL forecast distributions for each of the six month periods to 30 June 2003 as shown in the table below. These distributions may comprise both an income component (representing dividends from investments and interest) and a capital component. 6 months 6 months to 31 Dec to 30 June Distribution per Fully Paid Security 1 (Cents) Annualised Yield (based on $1.50 Issue Price) 7.0% 2 3.9% Annualised Yield above normalised 3 4.0% 3.9% 1 Paid in respect of the six month period ending June and December, respectively, of each year. Dividends are expected to be paid in February and August following each distribution period. 2 Annualised yield assuming payment of the Issue Price by investors under the Offer on 13 August Annualised yield adjusted for the exclusion of one-off underwriting fee income of $28.5 million received in July 2002 and one-off borrowing costs associated with the acquisitions of $13.5 million. The forecast distributions reflect the net cashflow expected to be received by MAp in each of the respective periods from its investments, interest on surplus funds and after payment of all cash costs paid or accrued at the end of each period. Distributions in any 12 month period may vary due to timing of dividends from investments. See Section 7.4 of this Prospectus for the forecast distribution assumptions. If returns from MAp s investments are greater than those forecast, Macquarie Airports Management and MAHBL may, at their discretion, consider making a distribution which is higher than the forecast distribution. If returns from the investments are lower than those forecast, Macquarie Airports Management and MAHBL may make distributions which are lower than forecast distributions, or no distributions at all. The level of distributions to be paid by Macquarie Airports Management and MAHBL will be dependent on achievement of the business plans of each of the airports in which MAp invests, including those investments made by MAG. 22 Prospectus Macquarie Airports

25 MAp may also, at its discretion, consider returning capital to Security Holders. Macquarie Airports Management and MAHBL can give no assurance for the six month periods ending 31 December 2002 and 30 June 2003 or for any future period regarding the payment of distributions as actual events might differ from the assumptions used in assessing the anticipated ability of MAp to pay those distributions. In addition, the forecasts above should not be taken as implied forecasts for future periods beyond 30 June 2003 of returns to Security Holders. 1.8 Implications of the Rome Acquisition not Proceeding Completion of the Rome Acquisition is subject to the satisfaction of a number of conditions precedent. The key conditions precedent are: 1. anti-trust clearance from the Commission of the European Union or the Anti-Trust Authority of Italy, as required; and 2. all necessary consents, approvals and waivers from governmental authorities (to the extent required), including the consent of the Italian privatisation agency, Istituto per la Ricostruzione Industriale S.p.A. ( IRI ), the previous public owner of 51.2 per cent of AdR sold to Leonardo in July A summary of the documents detailing the conditions precedent are set out in Section 11 of this Prospectus. Although MAp has no reason to believe that the Rome Acquisition will not proceed, there can be no certainty that the necessary waivers and consents will be obtained and that the other conditions will be satisfied. If the Rome Acquisition does not proceed, MAp may invest any funds raised through the Offer in other suitable investment opportunities. In the event MAp does not identify other suitable investment opportunities within a reasonable period of time, subject to satisfying legal and ASX requirements, MAp may make a capital return to Security Holders. MAp may have already entered into or will enter into agreements to hedge its foreign exchange exposure in relation to the Rome Acquisition. In the event that the Rome Acquisition does not proceed, MAp will close out this foreign exchange position and, as a result, MAp may realise a foreign exchange gain or loss. 1.9 Acceptance and Payment How to Accept If you wish to take up part of, all of, or more than your Priority Entitlement The number of Fully Paid Securities for which you have a Priority Entitlement is shown on the accompanying orange Priority Entitlement Form. In all cases please complete the Priority Entitlement Form accompanying this Prospectus in accordance with the instructions set out in the form. In particular, if you do not indicate the number of Fully Paid Securities for which you wish to subscribe, or if there is a discrepancy between the amount of the cheque and the number of Fully Paid Securities indicated, MAp may treat you as applying for as many Fully Paid Securities as your accompanying cheque or bank draft will pay for. Applications must be made on the orange Priority Entitlement Form accompanying this Prospectus and not the green Application Form in the back of this Prospectus. Applications must be accompanied by payment in full of $1.50 per Fully Paid Security applied for. You may wish to apply for only part of your Priority Entitlement. If you decide to apply for only part of your Priority Entitlement, you should complete the orange Priority Entitlement Form, nominating the number of Fully Paid Securities you wish to apply for, with payment in full of $1.50 per Fully Paid Security. Macquarie Airports Prospectus 23

26 You may apply for as many Fully Paid Securities as you wish on your Priority Entitlement Form. However, if you apply for more Fully Paid Securities than your Priority Entitlement as shown on the Priority Entitlement Form, this additional amount may be subject to scale back. If you wish to have your Fully Paid Securities allocated for early trading on ASX Eligible Security Holders have the opportunity to apply for their Priority Entitlement by no later than 6 August 2002, in order to participate in the Initial Allocation. Securities allotted under the Initial Allocation are expected to commence trading on ASX by 14 August All Applications under the Public Offer, Applications for more than your Priority Entitlement and Priority Entitlement Applications received after 6 August 2002 will be allocated under the Final Allocation. These securities are expected to commence trading on ASX by 6 September If you wish to subscribe for Fully Paid Securities and you are not a Security Holder (limited to Australian residents) Members of the public may apply for Fully Paid Securities by using the Application Form in the back of this Prospectus. However, they will not be entitled to a Priority Entitlement and may be subject to scale back as set out below. The closing date and time for receiving Applications under the Public Offer is 5.00 pm (AEST) on 27 August 2002 (subject to variation). Application Forms must be received by the Registry by this time, even if lodged through a stockbroker. Applicants are encouraged to submit their Application Form as soon as possible. Allocation Policy All Eligible Security Holders are entitled to receive their Priority Entitlement. As set out above, Eligible Security Holders may apply for more than their Priority Entitlement and members of the public may apply for Fully Paid Securities pursuant to this Prospectus. While it is expected that Eligible Security Holders will be given priority over general public applicants in respect of Fully Paid Securities applied for in excess of their Priority Entitlement, any amount by which Applications from Eligible Security Holders exceed their Priority Entitlements may be scaled back, at MAp s discretion, in such manner as MAp considers is reasonable in the circumstances (including, without limitation, to address situations where it is considered that Applications may be inflated or made on behalf of third parties or for on-sale). No Eligible Security Holder is assured of receiving any Fully Paid Securities applied for in excess of their Priority Entitlement. Allotment Allotment of Fully Paid Securities pursuant to the Institutional Placement and to certain institutional Security Holders under the Priority Entitlement Offer as described in Section 13, is expected to be made on or around 13 August Allotment of Fully Paid Securities pursuant to Priority Entitlement Forms is expected on or around 13 August 2002 or on or around 5 September 2002 depending on whether the Application is dealt with under the Initial Allocation or the Final Allocation (as described earlier). Allotment of Fully Paid Securities pursuant to Application Forms for the Public Offer is expected to be made on or around 5 September ASX Quotation Application for quotation of Fully Paid Securities on ASX will be made no later than seven days after the date of this Prospectus. Subject to approval being granted, quotation of the Fully Paid Securities is expected to commence within two business days of the relevant allotment date. 24 Prospectus Macquarie Airports

27 Section 1 Overview of the Offer Payment Priority Entitlement Forms and Application Forms must be completed in accordance with the instructions outlined on the Priority Entitlement and Application Forms. Cheques and drafts should be payable to Trust Company of Australia Ltd ACF MAp Group Subscriptions Account and crossed Not Negotiable. Do not forward cash. Receipts for payment will not be issued. Payment will only be accepted in Australian currency and cheques or bank drafts must be drawn on or payable at an Australian bank. Application Monies and Interest Monies received from an Applicant for Fully Paid Securities offered pursuant to this Priority Entitlement Offer will be held by the Custodian in a bank account ( Account ) established and kept by the Custodian solely for the purpose of depositing the Application Monies until those corresponding Fully Paid Securities are issued. To the extent that any Application for Fully Paid Securities is not satisfied in whole, Application Monies will be refunded without interest. MAp reserves the right to cancel the Priority Entitlement Offer at any time, in which case all Application Monies will be refunded without interest. To the fullest extent permitted by law, each Applicant agrees that such Application Monies will not bear interest as against the Custodian, irrespective of whether or not all or any of the Fully Paid Securities applied for by the Applicant are issued to that Applicant. Overseas Security Holders This Prospectus does not constitute an offer or invitation to subscribe for Fully Paid Securities in any jurisdiction where, or to any person to whom, it would not be lawful to make such an offer or invitation or issue this Prospectus. It is the responsibility of any applicant to ensure compliance with any laws of any country relevant to their Applications. The Public Offer is only made to residents in Australia and may only be accepted by residents in Australia. No action has been taken to register or qualify the Fully Paid Securities or the Priority Entitlement Offer, or otherwise permit a Public Offering of the Fully Paid Securities, in any jurisdiction outside Australia and New Zealand. The Fully Paid Securities have not been, and will not be, registered under the US Securities Act of 1933 (the Securities Act ) and may not be offered or sold in the US or to, or for the account or benefit of, US persons. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and anyone who receives this Prospectus should seek advice on and observe any such restrictions. Neither this Prospectus nor the accompanying Application forms may be sent to investors in the US or otherwise distributed in the US. No prospectus has been filed with the Registrar of Companies pursuant to the Public Offers of Securities Regulations 1995 on the grounds that the Securities are not being offered or sold to the public in the UK as a result of the Securities being offered to no more than fifty (50) persons in the UK. Additionally, the content of this Prospectus has not been approved by an authorised person in the UK and accordingly it may not be communicated to any person in the UK unless that person is of a kind described in Article 19 or Article 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 or is a person to whom this Prospectus may otherwise be lawfully communicated. The communication of this Prospectus to any other person in the UK is unauthorised and may contravene the Financial Services and Markets Act Macquarie Airports Prospectus 25

28 Section 1 Overview of the Offer If the Applicant is resident in Hong Kong, the Applicant represents and warrants that it intends to purchase the Fully Paid Securities for investment purposes only and not with a view to resale in Hong Kong. The entitlements of Security Holders with registered addresses outside Australia or New Zealand (other than those to whom offers are made as described in Section 13.3) will form part of the shortfall and will be dealt with in accordance with the allocation policy described above. Handling Fee A handling fee of one per cent of the Application monies (inclusive of GST) on Fully Paid Securities issued pursuant to this Priority Entitlement Offer and Public Offer will be paid by MAp to Participating Organisations of ASX and registered financial planners up to a maximum amount of $500 per individual Application, on Priority Entitlement Forms and Application Forms bearing their stamp. If an individual Application is on behalf of more than one beneficial holder, a list of beneficial holders must be provided in order to receive up to a maximum amount of $500 per beneficial holder. However, no handling fee is payable on any Application which exceeds 50,000 Fully Paid Securities. Where an Applicant lodges more than one Application, the fee is only payable on one Application Foreign Ownership Restriction Advice In order to ensure compliance with the foreign ownership restrictions applicable under the Airports Act with regard to investment in Federal Airports, MAp has limited foreign ownership to no more than per cent or such lower amount as MAp specifies to Security Holders as necessary to avoid a breach or potential breach of ownership restrictions under the Airports Act, or to avoid any non-compliance or potential non-compliance under the Airports Regulations in connection with: an airport operator company (as defined in the Airports Act); or a holding company of an airport operator company, in which MAp has a direct or indirect investment, where the breach, potential breach, non-compliance or potential non-compliance arises in whole or part because of the foreign ownership levels in MAp. The directors of Macquarie Airports Management and MAHBL have certain powers to enforce this limit including the power to request information from Security Holders, to require the disposal of a Security and to transfer Securities. Section 11 of the IPO Prospectus contains a summary of the constituent documents of MAT1, MAT2 and MAHBL relating to foreign ownership restrictions as at the date of the IPO Prospectus. Since that date the foreign ownership restrictions have been expanded to enable MAp to limit foreign ownership as necessary to prevent Macquarie Airports Management from becoming a foreign person for the purposes of the Airports Act by reason of the levels of foreign ownership in MAp Enquiries This document is important and requires your immediate attention. It should be read in its entirety. If you are in doubt as to the course you should follow, you should consult your stockbroker, solicitor, accountant or other professional adviser. Questions relating to the Priority Entitlement Offer can be directed to MAp s Investor Relations Team on , your stockbroker or other financial adviser. Questions relating to any aspect of your individual holding in MAp should be directed to MAp s registry, Computershare Investor Services, on Prospectus Macquarie Airports