Macquarie Atlas Roads Group

 Macquarie Atlas Roads Group (ASX: MQA), a global toll road developer with interests in five major international toll roads, had last updated the market about Macquarie Group Limited (Macquarie) completing the sale of its 11.3% principal holding in MQA. Macquarie had sold 76 million securities in MQA at a price of $6.00 per security to a wide range of institutional investors through a bookbuild. Meanwhile, MQA stock has risen 15.60% in three months as on January 08, 2018 and is trading at a low P/E.
 
While MQA would now like to have majority of interests embedded internally only, the media recently reported that Macquarie Atlas might bear the consequences of recent US tax changes. Particularly, the group may be required to start paying tax on its Dulles Greenway toll-road (100% interests) near Washington DC for a period of time at the back of changes to interest deduction. The changes in corporate tax payments are said to entail net interest deduction at 30% of earnings before interest, taxation and depreciation and amortisation (EBITDA) until 2021, and to 30% of earnings before interest and taxes (EBIT) thereafter. The Dulles Greenway toll-road was not subject to taxes for MQA and the taxable income or loss has been generally recognised by its partners until now.
 
On the other hand, changes to French taxation system entailing the lessening of the corporate income tax rate to 25% by 2022, are signalled to positively impact the group owing to its stake in French toll-road Autoroutes Paris-Rhin-Rhone (APRR). Thus, earnings from APRR are expected to boost performance in long-term.

The stock that is up 28.5% in last one year (as at January 08, 2018) is at high level and it would be better to “Hold” at the current price of $6.23

 
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