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Follow TURFMacquarie charges excessive fees, shareholders revolt
This shows the gluttony of the private toll operators. They waste money and charge excessive fees that are all ultimately baked into the toll.
Macquarie Atlas refuses to part ways with external manager
By Jenny Wiggins
The Age,com April 16, 2014
Macquarie Atlas Roads' chairman has knocked back calls to dump Macquarie as the toll road company's manager after investors claimed the financial group was being paid too much.
''We have looked at internalisation and our view is: not now,'' Macquarie Atlas chairman David Walsh told investors at the company's annual meeting in Sydney.
The Australian Shareholders Association, which voted against the toll road group's remuneration report - which was easily passed with 99 per cent of votes in favour - wants the company to break away from the Macquarie Group, claiming the fees it pays are ''excessive''.
Macquarie, which owns about 20 per cent of the toll road group, receives base management fees equivalent to 1 per cent of Macquarie Atlas' market capitalisation when it is more than $1 billion.
Macquarie Atlas' current market capitalisation is $1.4 billion, and Macquarie received total fees of almost $37 million in 2013.
Mr Walsh disputed the ASA's claim the management fees were excessive, and said it was ''not fair'' to suggest Macquarie was ''gouging'' fees.
He also denied the need for the group to ''break up'' with Macquarie, arguing that internalisation would be costly, and there were risks in transferring management out of Macquarie's ''safe hands''.
The company would consider internalisation over the next two years, but any decision needed the support of both Macquarie Atlas and Macquarie, Mr Walsh said.
The ASA pointed out that other companies that had internalised management had ''progressed'' without the help of Macquarie.
The Australian Infrastructure Fund, owner of stakes in Melbourne and Perth airports, agreed to internalise the group's management at a cost of $55 million in 2012, while Macquarie Airports, now Sydney Airport, internalised management in 2009, paying Macquarie a $345 million ''break fee''.
The ASA has estimated a similar break fee for Macquarie Atlas would be between $50 million and $100 million.
Macquarie Atlas was spun out of the Macquarie Infrastructure Group in 2010.
Macquarie Atlas' chief executive Peter Trent and chief financial officer Mary Nicholson are employed by Macquarie.