THE independent directors of Macquarie International Infrastructure Fund (MIIF) have recommended that shareholders back the sale of its stake in Taiwan Broadband Communications.
The company stands to pocket at least $469.5 million from the deal, after accounting for transaction costs.
Directors told shareholders in a circular ahead of the April 30 vote that they should approve a proposed capital reduction and for the sales proceeds to be returned to them.
The exercise will involve distributing up to $1 billion to MIIF shareholders, possibly via multiple payouts.
Capital reduction exercises provide a way to distribute cash back to shareholders. Market watchers say that they also offer tax benefits to overseas shareholders who may be from countries with taxes on dividends.
MIIF said it may distribute cash via a dividend if the sale of the Taiwan Broadband Communications stake is approved but the capital reduction is opposed by shareholders.
The company holds 47.5 per cent of Taiwan Broadband Communications, a cable television company. It wants to sell the stake to the trustee-manager of Asian Pay Television Trust (APTT), a wholly owned subsidiary of Macquarie Group.
APTT in turn wants to list its units on the Singapore Exchange as a business trust.
MIIF's shares ended flat at 58 cents today.