MKIF lodges preliminary prospectus with the FSS in Korea

21 February 2006

NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR THE UNITED KINGDOM

Macquarie Bank Limited notes that the Macquarie Korea Infrastructure Fund (“MKIF”), formerly known as the Korean Road Infrastructure Fund, today lodged with the Financial Supervisory Service (“FSS”) a preliminary prospectus for an initial public offering and listing of common shares on the Stock Market Division of the Korea Exchange (“KRX”).

MKIF is looking to raise new capital of KRW 500 billion through the initial public offering in Korea (“Domestic Offering”) and concurrent offering of global depositary shares ("GDSs”) to international institutional investors outside Korea ("International Offering”).MKIF intends to make an application for the GDSs to be listed on the Professional Securities Market of the London Stock Exchange (“PSM”).

About the Domestic Offering

The Domestic Offering will consist of ordinary shares, which will be marketed to institutional and retail investors in Korea at a price range of between KRW 6,800 to 8,250 per share. The indicative timetable for the Domestic Offering targets listing of MKIF shares on the KRX on 15 March 2006.

Concurrent International Offering of GDSs

The International Offering will consist of GDSs, which will be marketed to institutional investors outside Korea at an initial price per GDS which will be set at the time the price for the Domestic Offering is set. Listing and trading of the GDS on the PSM is expected to occur on 14 March, 2006, one day prior to the date of listing of MKIF shares on the KRX.

The actual timing of events related to the Domestic Offering and International Offering, as well as the number and pricing of shares and GDSs sold, may vary subject to a number of factors, including market conditions.

The Macquarie Group’s Interest in MKIF and MSIAM

Listing Performance Fee

Under a Management Agreement executed between MKIF and MSIAM in December 2002, the listing of MKIF will trigger a performance fee calculation. The performance fee is calculated as a proportion of the value created for MKIF’s existing shareholders. To the extent there is a performance fee payable, it will be payable by MKIF to MSIAM.

For the purposes of illustration only, MKIF has estimated that the range of the listing performance fee payable to MSIAM is approximately KRW 69 billion to KRW 136 billion, based on the pricing range of the domestic offer and the performance fee calculation methodology outlined in the preliminary prospectus. There can be no assurance that the actual amount of the listing performance fee will be within the range estimated, as the amount of the fee will depend on the date of listing, the distributions received prior to listing and other factors.

As a shareholder of MSIAM, the Macquarie Group will be entitled to a 50% share of any such listing performance fee payment (after payment of tax in Korea). The timing of recognition by the Macquarie Group of its portion of the listing performance fee will depend on the timing of the listing.

Macquarie Group Shareholding in MKIF

The Macquarie Group holds an interest in MKIF. It will be subject to a lock-up with respect of its interest in MKIF for a period of 12 months after the offering is completed. Any profit on the Macquarie Group's holding in MKIF will only be recognised should its interest be sold.

Underwriting Syndicate

MBL is acting as global co-ordinator and a joint lead manager and bookrunner of the International Offering and Macquarie Securities Limited, Seoul Branch (“MSL”) is acting as a joint lead manager and underwriter of the Domestic Offering. Each of MBL and MSL are entitled to receive fees for acting in this capacity. The size of these fees depends on the total size of the offering and the arrangements between all members of the MKIF underwriting syndicate.

For further information, please contact:

Erica Sibree
Investor Relations
Macquarie Bank Limited
Tel: (612) 8232 5008
Mobile: (614) 1302 6309

Matthew Russell
Public Relations
Macquarie Bank Limited
Tel: (612) 8232 4102
Mobile: (614) 1069 9532

This press release is not an offer for sale of the securities of Macquarie Korea Infrastructure Fund in the United States or in any jurisdiction where any offer, sale or solicitation in respect of such securities is not permitted. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended, or in any jurisdiction where such offer or sale is not permitted. Macquarie Korea Infrastructure Fund does not intend to register any portion of any contemplated offering in the United States or to conduct a public offering of securities in the United States.

Not for distribution in the United States or in any jurisdiction where any offer, sale or solicitation in respect of the contemplated securities is not permitted.

This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). Any securities will only be available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire any securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. Stabilisation/FSA.

Any offer of securities to the public that may be deemed to be made pursuant to this communication in any EEA Member State that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the “Prospectus Directive”) is only addressed to qualified investors in that Member State within the meaning of the Prospectus Directive.

 

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