Infrastructure

Cox: Belt and Road paving way to worrying excess

17 April 2018

Hallmarks of speculative exuberance abound with China's plan to recreate modern Silk Road trade routes. There are fancy new banking jobs, silly conferences and creative investment ideas. The danger is the $1.5 trln initiative devolves into an epic era of capital misallocation.

D.C. subway could ride Hong Kong’s MTR

20 March 2018

The Washington Metro's equipment and safety woes are a smoking symbol of U.S. infrastructure ineptitude. Market-based fixes would be wise. Other cities have hired Hong Kong's mass-transit provider for help, but its property and punctuality playbook also may be replicable.

Abertis rethink would avoid bidder roadkill

8 March 2018

Rival bidders Atlantia and ACS are mulling a breakup of the Spanish group, reports say. It would nix the idea of a European champion. But if Atlantia forgets Spain to focus on Abertis’ other assets, it would be politically easier – and avoid a pricey bidding war.

Macquarie Infrastructure slips on $2 bln banana

22 February 2018

That’s how much the power-to-airport-services group’s stock plunged after the loss of fuel-oil contracts led it to slash the dividend and put assets up for sale. Getting caught out by a shifting U.S. energy mix is embarrassing. Having too much leverage compounds the damage.

Trump budget is mostly fan fiction for Republicans

12 February 2018

The administration called for cuts in non-military programs in its $4.4 trln budget for 2019. Last week’s two-year spending deal effectively dooms the plan, though it may offer a blueprint for GOP budget hawks. A new infrastructure push offers one hope of bipartisan dealmaking.

Macquarie takes bold dive into Danish telecoms

12 February 2018

Teaming up with local pension funds to buy TDC for $6.7 bln is a bet on ultra-fast broadband. It’ll be hard to cut costs at the former private equity-owned firm. Stiff competition for infrastructure assets is forcing the Aussie bank to take risks. Financial engineering may help.

Atlantia can just afford to up the ante on Abertis

9 February 2018

The Italian toll-road operator may raise its offer for the Spanish peer to at least 19 euros a share in cash, trumping a bid by German rival Hochtief. Despite the lack of clear cost savings, cheap funding makes the combined group’s increased leverage just about manageable.

America’s real infrastructure need is a repair kit

7 February 2018

President Trump wants to build gleaming new highways and railways with his $1.5 trln infrastructure plan. But the U.S. already has most of the networks it needs. Repairs and upgrades aren’t flashy, but they would produce a bigger bang for the government’s limited bucks.

BT belatedly remembers it’s a telecom business

2 February 2018

Under new chair Jan du Plessis, the former UK telephone monopoly seems more focused on network investment than costly TV forays. It is building more fibre internet lines and may declare a truce with rival Sky on soccer rights. That should please both regulators and shareholders.

Gasoline tax is obvious infrastructure piggy bank

18 January 2018

The U.S. Chamber of Commerce wants a 25 cents-a-gallon increase to raise $400 bln for investment in transportation. It seems a contrary proposal coming from a group whose members just secured huge tax cuts. But it makes sense: American gas is cheap, and a higher levy is overdue.

Mnuchin and Dudley exemplify a political dilemma

12 January 2018

The U.S. Treasury secretary, contradicting forecasts, expects tax cuts to pay for themselves. The New York Fed chief fears growing deficits and debt. Republicans may nod to the former but enough probably worry about the latter to hamper new outlays on infrastructure and the like.

Duterte’s infrastructure push needs more than cash

2 January 2018

A new revenue-raising tax bill will help Philippines President Rodrigo Duterte pay for a “golden age of infrastructure” to increase competitiveness and living standards. The challenge will be to deploy the proceeds efficiently and without fostering corruption.

China’s belt will get tighter and its road bumpier

20 December 2017

Xi Jinping's ambitious infrastructure plan enters its fifth year with some notable struggles. Countries are pushing back for political and economic reasons while Chinese banks grapple with mounting debt. So-called Belt and Road projects require more of a team effort in 2018.

U.S. will miss out on infrastructure again in 2018

18 December 2017

From air-traffic control to roads to schools, the White House says it’s a priority but focuses its energy elsewhere. Tax policy might boost private capital, yet other barriers lurk. And as the GOP squeezes the budget, the feds will have less to spend. It adds up to more gridlock.

Private equity taps new pockets to extend water bet

3 November 2017

Investors led by a Rockefeller, Mellon and Harriman family LBO vehicle have made a sixfold paper profit on their 2014 buyout of Evoqua. IPO buyers won’t get near that even after a decent debut. But Evoqua’s status as a takeover target should make both sets of owners happy.

Dubai demonstrates the distance ahead of Saudi

1 November 2017

The UAE’s most populous emirate has become a global financial hub thanks to a diversified economy and tolerance of Western culture. Now Dubai is pushing a green agenda. The kingdom can learn much from its smaller neighbor, including its imperfections, as it tries to catch up.

Arqiva’s old-school TV vibe creates IPO static

24 October 2017

The UK broadcast and mobile masts company plans to raise 1.5 bln stg. An order book of mostly inflation-proofed long-term contracts and the pledge of big dividends are appealing. Less so is its reliance on TV towers rather than the cell ones that are tomorrow’s money spinners.

Telecom stress can take Indian M&A to new heights

24 October 2017

A KKR-led consortium reportedly wants to merge two top telecom tower companies, and end up with 45 pct of the enlarged entity. It would be a monster transaction for private equity in India. The strategic rationale looks sound but fixing a valuation might be tricky.

Spanish toll-road bid steamrollers Benettons

18 October 2017

ACS has made a 17 billion euro offer for infrastructure operator Abertis, using the balance sheet of its German unit Hochtief. The price is better than a rival bid from Atlantia, controlled by Italy’s Benetton family. It owes more to cheap debt than economic sense.

ACS faces bumpy road to join Abertis battle

13 October 2017

The Spanish builder is planning a cash-and-share offer for the toll-road operator using its German Hochtief unit. Beating Atlantia’s $20 billion bid faces several hurdles. The Italian group has offered more cash. For ACS, taking on a lot more debt could also be problematic.