MIC: parking sale won’t happen until 2010

The management of the Macquarie Infrastructure Company (MIC) said today that the sale of its struggling airport parking business will not take place until 2010, dashing previous expectations to have a deal done by the end of the year.

James Hooke, chief executive officer of MIC, told listeners during a conference call that the “airport parking business is negotiating asset sale and purchase agreement and expects to close on a trans in 2010”.

“We’d like to be further down the path with the airport parking business, but the process is moving ahead in an orderly fashion,” he added later on in the call.

In August, Hooke had said that, “given the process and the level of interest being shown, we believe we will have a resolution before the end of the year.”

Parking business: headache for MIC

The business, Parking Company of America, had become a drag on MIC’s results as it struggled with declining revenues due to decreasing air passenger traffic at the 20 major cities in the US where it operates parking.

MIC said in a statement it signed a letter of intent with a buyer for the business and any potential sale “will likely occur in connection with a bankruptcy filing and consummation of a Chapter 11 plan”.

MIC has eliminated Parking Company of America from its consolidated results because of its intent to sell the business.

MIC said its businesses generated $24.2 million in cash for the third quarter, not including debt reduction, a measure it calls CADR (cash available before debt reduction). In the same quarter last year, it reported 13.6 percent more in CADR, or $28 million.

Year-to-date, MIC has generated $80.1 million in CADR.

Hooke said MIC will continue to use its cash to deleverage the business and expects that the firm’s $66.4 million holding company revolving credit facility due in March 2010 will be paid off completely by the end of next year.

Asked by an analyst whether the focus on deleveraging means that MIC is no longer an acquisitive investor, Hooke answered that “we’re not in the market for acquisitions”.

Since its initial public offering in 2004, MIC has been investing in infrastructure assets throughout the United States. The largest part of its portfolio is comprised of airport services, or fixed-base operations that provide airport refueling and related services. Other businesses include bulk liquid storage, energy, gas production and distribution, and the soon-to-be-sold airport parking business.

MIC shares ended the day down 0.4 percent on the New York Stock Exchange, closing on $7.75.