Macquarie International Infrastructure Fund (MIIF) intends to appoint just one more independent director to the board. This latest development yesterday came ahead of a special general meeting (SGM) today, called for by requisitioning shareholders LIM Advisors and Metage Capital to raise the board size.

The MIIF board yesterday recommended shareholders to vote for the first resolution ' "to increase the maximum number of directors of the company to nine". "This will allow the board the ability to appoint an additional independent director," the board said, adding: "The search for an additional independent director will be undertaken by MIIF's Nominations and Corporate Governance Committee together with representatives from a number of MIIF's major shareholders." The committee members are MIIF's current
four independent directors.

It continued to ask shareholders to vote against the second, third, and fourth resolutions, which involve appointing three of the requisitioning shareholders' nominees to the board.

In our view, MIIF's decision to bring forward the appointment of one more independent director to its board at today's special general meeting is very likely prompted by a call from requisitioning shareholders LIM Advisors and Metage Capital to raise the current board size from 5 to 9. MIIF has previously urged all shareholders to vote against all resolutions put forward by LIM advisors and Metage Capital, which includes a proposal to increase the board size. Thus, we believe MIIF's proposal to bring in an additional independent director could be viewed as an attempt to compromise and seek common ground with its requisitioning shareholders. Noting MIIF's recent share price movements, shareholders are perhaps optimistic that the move to increase board size could help address MIIF's current deep discount to book value of 19% and are viewing it as a positive development. Further positive catalysts could arise pending
the outcome of its strategic review and we maintain our BUY call with a fair value of S$0.680.

Source: AmFraser