Friday, January 09, 2009

Indiana Toll Road Operator Selling Off Assets To Avoid Financial Meltdown

Macquarie Group, the Australian investment firm involved in a joint venture to operate the Indiana Toll Road under a 75-year lease with the State of Indiana, has been forced to sell off assets to strengthen its financial condition. The Daily Telegraph reports:

MACQUARIE Group has sped up an asset sell-off to strengthen its capital and balance sheet, after the investment bank warned profits continue to be squeezed by the global financial crisis. The effective profit downgrade from Australia's largest investment bank came after it sold its margin lending book, which had almost halved in value in just four months, reports The Australian.

Macquarie sold the $1.5 billion book to Bendigo and Adelaide Bank, but will retain a $500 million stake.

The lending book was valued at $2.9 billion at the end of September, but $900 million has been wiped off as the bank's clients and investors dumped margin loans.

Macquarie's earnings warning said profits could be hurt this half by global volatility.

"Importantly, during the quarter to December, market conditions were exceptionally challenging for almost all of Macquarie's businesses, adversely impacting levels of business activity and profitability," the bank said.

"The outlook statement provided at the interim results noted that unprecedented market conditions make short-term forecasting extremely difficult and was subject to a number of swing factors."

The bank plans another $3 billion in asset sales before its year-end in March, with transactions expected in Hong Kong and real estate investments and some mortgage warehousing deals . . .

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