Indiana Toll Road operators "on the verge of bankruptcy"?

Update: The operators of the Indiana Toll Road have since responded to Bauer's claims, saying the ITR Concession Company is "very capable of weathering the current economic storm." For more of the company's response, read the story titled Toll Road operators "capable of weathering … economic storm"

The foreign operators of the Indiana Toll Road are said to be “on the verge of bankruptcy.” The quote comes from the Speaker of the Indiana House of Representatives, B. Patrick Bauer, (D) South Bend.

“I believe yes, that they’re in trouble,” Bauer told NewsCenter 16. In fact, Bauer said the toll road was like a “ping pong ball” in a game of international trade.

Macquarie Infrastructure Group of Australia first took control of Indiana Toll Road operations in June of 2006.

Given the current economic conditions many businesses have faced a bumpy road, and some say Macquarie is one of them.

“The signs are that they have to sell some assets in order to get back into financial stability and the two assets that have been mentioned are the Indiana Toll Road and the Chicago Skyway,” said Speaker Bauer.

Bauer was mainly referring to a July 8th article in the newspaper, The Australian. The article quotes Merill Lynch analysts as saying, “The debt taken on to buy the roads was too high, given the performance of the roads since they were purchased.”

The article later quotes financial services company UBS as saying, “The Macquarie Infrastructure’s assets, including the Chicago Skyway and Indiana Toll Road could be sold for a nominal amount,” to remove fear that the fund may have to pump additional equity into its U.S. assets.

“I would say anything is possible, it’s also possible you’ll get a buyer that may be worse than they are, as far as the care, maintenance, and operation,” Bauer said.

Bauer says his office commonly gets constituent complaints about toll road service.

When presented with the news, Ind. Rep. Jackie Walorski, (R) Jimtown, said “I haven't heard that.”

But Rep. Walorski insists that Hoosier taxpayers are protected, given the questions she asked before voting for the Major Moves program that cleared a path for the toll road lease.

“If there were to be a default in that lease, the safeguards that were put in that lease were to protect Hoosier taxpayers and the State of Indiana, and if there was a default in the lease we’d keep all their money, the $3.8 billion, plus all the interest, plus all the repairs would be made to the road, plus the road is ours and the State of Indiana would have to approve any other lease that would ever go forward from there,” Walorski said.

Macquarie Infrastructure Group did release a statement in December of 2008 saying that it had sold its interest in the Westlink M-7 toll road in Sydney, Australia. That sale netted the company A$402.5 million.

Macquarie also released a statement indicated that it would take further steps to “enhance security holder value,” that would be announced by August 20, 2009.

The stock price of Macquarie Infrastructure Group hit a 52-week low in February of 2009 at A$0.95 per share. The stock last closed at A$1.40 per share.


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