CIF: Risk reduced, upside improved

A deal to sell one of Challenger Infrastructure Fund's investments cements the upside for this listed infrastructure investor.

Challenger Infrastructure Fund made an important announcement yesterday. Stemming from the strategic review first announced last August, the fund is selling its 66.2% stake in LBC Tank Terminals—its most valuable investment—to a group of Dutch and Australian superannuation investors for a total of US$277.8m. We had suspected its other asset, Inexus, was the one on the chopping block, but the more we think about this deal the more it makes sense.

After deal costs, and with the exchange rate already locked in, CIF expects to receive net proceeds of A$281m (the recent fall in the AUD has proven a nice fillip).

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