MACQUARIE INTERNATIONAL INFRASTRUCTURE FUND …...MACQUARIE INTERNATIONAL INFRASTRUCTURE FUND LIMITED (A mutual fund company incorporated with limited liability in Bermuda) CIRCULAR

MACQUARIE INTERNATIONAL INFRASTRUCTURE FUND LIMITED(A mutual fund company incorporated with limited liability in Bermuda)

Circular dated 3 July 2015

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

The Singapore Exchange Securities Trading Limited (the “SGX-ST”) takes no responsibility for the accuracy of any statements or opinions made, or reports contained, in this Circular. If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other professional advisers immediately.

If you have sold your ordinary shares (the “MIIF Shares”) in the capital of Macquarie International Infrastructure Fund Limited (“MIIF”), please forward this Circular immediately, together with the Notice of Special General Meeting and the accompanying Proxy Form, to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee.

MACQUARIE INTERNATIONAL INFRASTRUCTURE FUND LIMITED(A mutual fund company incorporated with limited liability in Bermuda)

CIRCULAR TO SHAREHOLDERS

IN RELATION TO THE PROPOSED DIVESTMENT OF HUA NAN EXPRESSWAY

INDEPENDENT FINANCIAL ADVISER

KPMG CORPORATE FINANCE PTE LTD

IMPORTANT DATES AND TIMES

Last Date and Time for Lodgment of Proxy Forms : 25 July 2015 at 10.30 a.m.

Date and Time of Special General Meeting (“SGM”) : 27 July 2015 at 10.30 a.m.

Place of SGM : Fairmont Singapore, Raffles City Convention Centre, Canning Room,80 Bras Basah Road,Singapore 189560

TABLE OF CONTENTS

PAGE

CORPORATE INFORMATION ............................................................................................................. 3

EXECUTIVE SUMMARY ...................................................................................................................... 4

1. INTRODUCTION ........................................................................................................................ 8

2. THE PROPOSED DIVESTMENT .............................................................................................. 10

3. ILLUSTRATIVE FINANCIAL EFFECTS OF THE PROPOSED DIVESTMENT ........................ 16

4. TAXATION .................................................................................................................................. 17

5. OPINION OF THE INDEPENDENT FINANCIAL ADVISER IN RELATION TO THE PROPOSED DIVESTMENT ....................................................................................................... 18

6. INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS ................................. 19

7. DIRECTORS’ RECOMMENDATIONS ...................................................................................... 19

8. SPECIAL GENERAL MEETING .............................................................................................. 20

9. DIRECTORS’ RESPONSIBILITY STATEMENT ....................................................................... 20

10. ADVICE TO SHAREHOLDERS ................................................................................................. 20

11. CONSENT .................................................................................................................................. 20

12. DOCUMENTS ON DISPLAY ..................................................................................................... 20

GLOSSARY.......................................................................................................................................... 21

APPENDIX I – KEY TERMS OF THE SALE AND PURCHASE AGREEMENT ................................. 25

APPENDIX II – IFA LETTER I ............................................................................................................. 26

APPENDIX III – IFA LETTER II ........................................................................................................... 35

2

CORPORATE INFORMATION

Directors Mr. Heng Chiang Meng (Chairman and Independent Director)Mr. Robert Andrew Mulderig (Independent Director)Mrs. Lee Suet Fern (Independent Director)Mr. Philip Jackson (Independent Director)Mr. Alexander Ribaroff (Independent Director)Mr. Francis Pui-Cheun Kwok (Nominated Director, Executive)

Registered Office and Principal Place of Business

Penboss Building50 Parliament Street2nd FloorHamilton HM 12Bermuda

Bermuda Company Registration Number

EC36305

Manager Macquarie Infrastructure Management (Asia) Pty LimitedLevel 6, 50 Martin PlaceSydney NSW 2000Australia

Singapore Share Transfer Agent M & C Services Private Limited112 Robinson Road #05-01Singapore 068902

Legal Adviser to MIIF as to Singapore law

Allen & Gledhill LLPOne Marina Boulevard #28-00Singapore 018989

Legal Adviser to MIIF as to Bermuda law

Conyers Dill & Pearman LimitedClarendon House2 Church StreetHamilton HM11Bermuda

Independent Financial Adviser KPMG Corporate Finance Pte Ltd 16 Raffles Quay #22-00Hong Leong BuildingSingapore 048581

Auditor PricewaterhouseCoopers LLPPublic Accountants and Chartered Accountants8 Cross Street #17-00PWC BuildingSingapore 048424

3

EXECUTIVE SUMMARY

The following summary is qualified in its entirety by, and should be read in conjunction with, the full text of this Circular. The meanings of terms not defined in this summary can be found in this Circular (please see the section titled “Glossary” on pages 21 to 24).

1 INTRODUCTION

In October 2012, the board of directors of MIIF (the “MIIF Board” or the “Directors”) announced a strategic review (the “Strategic Review”) to consider a range of alternatives focussed on generating value for shareholders of MIIF (the “Shareholders”). These alternatives included, inter alia, the continuation of MIIF in its existing form, the revision of MIIF’s investment mandate, the changing of MIIF’s structure and its listing jurisdiction, asset divestments, the winding up of MIIF, and capital returns. The objective of the Strategic Review was to formulate strategies that in the MIIF Board’s opinion were in the best interests of Shareholders.

On 18 December 2012, the MIIF Board announced the completion of the Strategic Review. The Strategic Review, which included an assessment by CIMB Bank Berhad, Singapore Branch (“CIMB”)1 and consultation with a cross section of Shareholders, resulted in the decision that the following initiatives should be undertaken in order to maximise value for Shareholders:

distribute existing excess cash to Shareholders as a one-off special dividend;

allow MIIF’s corporate-level debt facility to lapse upon maturity and not renew such debt facility;

pursue the orderly divestments of MIIF’s interests in Taiwan Broadband Communications (“TBC”), Hua Nan Expressway (“HNE”), Changshu Xinghua Port (“CXP”) and Miaoli Wind;

distribute the proceeds from any divestments to Shareholders as soon as practicable; and

amend the management fee arrangement with Macquarie Infrastructure Management (Asia) Pty Limited (“MIMAL” or the “Manager”) to better align the interests of MIIF and the Manager,

(together, the “MIIF Initiatives”).

With the receipt of Shareholders’ endorsement of the MIIF Initiatives in March 2013, the MIIF Board has implemented a number of actions in line with the MIIF Initiatives, including the:

divestment of MIIF’s 47.5% interest in TBC via an initial public offering of Asian Pay Television Trust on the SGX-ST on 29 May 2013. MIIF distributed 45.4 cps as a return of capital to Shareholders;

divestment of MIIF’s 38.0% effective interest in CXP to Pan-United Infrastructure Pte. Ltd. and Petroships Investment Pte Ltd on 25 September 2013. MIIF distributed 9.7 cps as a return of capital to Shareholders; and

divestment of MIIF’s 100.0% interest in Miaoli Wind to Challenger Emerging Market Infrastructure Fund Pte Ltd on 14 November 2013 for a total cash consideration of NT$2.25 million (S$94,768) 2.

HNE is the sole remaining investment in MIIF’s portfolio and the MIIF Board has been evaluating options to divest MIIF’s entire interest in HNE and return the divestment proceeds to Shareholders in a timely manner. Assuming that HNE is successfully divested, this would complete the MIIF Initiatives and in turn, lead to the delisting of MIIF from the Main Board of the Singapore Exchange Securities Trading Limited (“SGX-ST”) and its subsequent winding up.

1 CIMB was appointed by the MIIF Board as the independent financial adviser to assist the MIIF Board with the Strategic Review.

2 S$:NT$ exchange rate is based on a rate of S$1:NT$23.7421 as at 19 June 2013.

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2 THE PROPOSED DIVESTMENT

2.1 Background

Macquarie International China Holdings Limited (“MICHL”), a wholly-owned subsidiary of MIIF, has an 81.0% effective interest in HNE (comprising Phase I and II of the toll road). This interest is held through a 90.0% interest in South China Highway Development (H.K.) Ltd. (“SCHK”) with the remaining 10.0% interest in SCHK held by Topwise Consultants Limited (“Topwise” or the “Purchaser”). SCHK in turn holds a 90.0% interest in HNE, with the remaining 10.0% held by Guangzhou Centre for Administration of Municipal & Gardening Works (“Guangzhou Centre”), a Guangzhou government entity.

HNE is a 31-kilometre dual-carriage urban toll road in the city of Guangzhou, the capital of Guangdong province in People’s Republic of China (“China”). HNE has the exclusive right to operate and collect tolls up to 2026. It is the main artery for north-south traffic in Guangzhou. HNE is MIIF’s sole remaining investment.

In line with the strategy to maximise value for Shareholders, MIIF initiated a formal sales process for HNE with the advice of Citigroup Global Markets Asia Limited (“Citi”). During this period, MIIF and Citi conducted an extensive global sales process with approaches made to potential third party purchasers. In addition, MIIF also separately approached Topwise, the existing co-shareholder of SCHK, with regard to a potential sale of MIIF’s interest in SCHK to Topwise.

On 15 May 2015, MIIF announced it had agreed to sell its entire interest in SCHK to Topwise for a total cash consideration of S$110.0 million (the “Consideration”)3. The MIIF Board believes that the divestment of MIIF’s entire interest in SCHK to Topwise (the “Proposed Divestment”) provides the best value for Shareholders and allows for a timely exit of the investment in HNE. The Proposed Divestment represents the best offer received by MIIF. The Proposed Divestment constitutes a major transaction for MIIF as defined in Chapter 10 of the Listing Manual of the SGX-ST (the “Listing Manual”) for which Shareholders’ approval will need to be sought.

Should Shareholders’ approval be given for the Proposed Divestment, MIIF intends to distribute the net proceeds and any excess cash following the settlement of its liabilities to Shareholders, by way of a redemption of ordinary shares in the capital of MIIF (the “Share Redemption”). The net proceeds to be distributed to Shareholders following the Proposed Divestment are estimated to be approximately 8.25 cps. The Share Redemption would complete the MIIF Initiatives and in turn, lead to the delisting of MIIF from the SGX-ST and its subsequent winding up.

This Circular seeks Shareholders’ approval for MIIF, through its wholly-owned subsidiary MICHL, to divest its entire 90.0% interest in SCHK (the “Disposed Interest”) to Topwise. Topwise is an existing shareholder of SCHK with an interest of 10.0%. Should Shareholders’ approval be given for the Proposed Divestment, MIIF intends to distribute the net proceeds and any excess cash following the settlement of its liabilities to Shareholders by way of the Share Redemption.

2.2 Rationale and Benefits of the Proposed Divestment

Realisation of Strategy to Maximise Value

The Proposed Divestment is in line with the strategy to maximise value for Shareholders announced by the MIIF Board on 18 December 2012 and endorsed by Shareholders in March 2013.

Assuming the Proposed Divestment completes, MIIF intends to distribute net proceeds of approximately 8.25 cps to Shareholders by way of the Share Redemption. As a result, MIIF would have delivered net proceeds from the divestment of TBC, CXP, Miaoli Wind and HNE (including excess cash) of 66.44 cps to Shareholders, which is 24.0% higher than MIIF’s share price of 53.5 cps when the Strategic Review was first announced on 10 October 2012. In addition, MIIF has also distributed a total of 5.15 cps of ordinary dividends from October 2012 to date, thereby delivering a total return of 33.6% to Shareholders in that period.

3 Transaction costs have not been deducted from the Consideration.

4 Excludes ordinary dividends paid from October 2012 to date.

5

Furthermore, the proceeds5 (“Divestment Proceeds” or “Sale Proceeds”) from the divestment of TBC, CXP, Miaoli Wind and HNE are estimated to be S$719.4 million, which is approximately S$24.5 million higher than the threshold level of S$694.9 million (the “Threshold”) approved by Shareholders as part of the management fee revisions in March 2013. As a result of realising Divestment Proceeds of approximately S$719.4 million from the divestments for Shareholders and completing the MIIF Initiatives, a Success Fee of approximately S$17.4 million will be payable to the Manager.

The Proposed Divestment and Share Redemption would complete the MIIF Initiatives which commenced in 2013 and in turn, lead to the delisting of MIIF from the SGX-ST and its subsequent winding up.

Best Offer to Shareholders following an Extensive Sales Process

MIIF and Citi have conducted an extensive global sales process with approaches made to third party purchasers. In addition, MIIF also separately approached Topwise, the existing co-shareholder of SCHK, with regard to a potential sale of MIIF’s interest in SCHK to Topwise. Following this process, MIIF entered into negotiations with Topwise in relation to the Proposed Divestment. The MIIF Board considers that the Proposed Divestment to Topwise represents the best offer to Shareholders.

As an existing shareholder of HNE, Topwise does not require any due diligence on HNE. Accordingly, the Proposed Divestment will not be subject to the conditions typically expected from other third party purchasers and includes only limited representations and warranties. It is critical that there is minimal residual liability to MIIF after the Proposed Divestment given that MIIF intends to distribute the net proceeds and any excess cash following the transaction and will be delisted and wound up post the transaction. The Proposed Divestment delivers this outcome.

Fair and Reasonable Valuation

The Consideration of S$110.0 million for the Proposed Divestment was negotiated on a “willing-purchaser, willing-seller” basis after taking into consideration:

(a) the extensive sales process undertaken by MIIF;

(b) the Directors’ valuation of HNE as at 31 December 20146;

(c) the recent trading multiples for listed toll roads7;

(d) the level of execution certainty; and

(e) the attractiveness of pursuing the divestment of HNE versus retaining the asset and thereby continuing MIIF in its current form.

In addition, the MIIF Board has engaged KPMG Corporate Finance Pte Ltd (“KPMG”) to act as an independent financial adviser in relation to the transaction. Following a comprehensive review of the Proposed Divestment, it is KPMG’s opinion that the Proposed Divestment is fair and reasonable to MIIF and its Shareholders.

5 “Sale Proceeds” is referred to in the Management Agreement as the Singapore dollar equivalent of the proceeds from all or part of the divestment of CXP, HNE, TBC and Miaoli Wind, less:

transaction costs incurred by MIIF associated with such divestments, which, for the avoidance of doubt, do not include the Success Fee (as defined in the Management Agreement); and

if, in the period after 31 December 2012 and prior to the date of its divestment, the businesses (TBC, CXP, Miaoli Wind and HNE) being divested breaches its distribution policy such that cash that could otherwise have been distributed is instead retained by the businesses or utilised by the businesses to make voluntary unscheduled debt repayments, any cash amounts that would have been received by MIIF, had the businesses adhered to its distribution policy.

6 Valuation of HNE as at 31 December 2014 of S$120.2 million reflects the latest published valuation of HNE prior to the signing of the Sale and Purchase Agreement.

7 The Consideration implies a historical EV (as defined herein) per remaining concession/EBITDA (as defined herein) multiple of 0.53 times and EV per remaining concession/free cash flow of 0.66 times, which are both within the range of market comparables of 0.47 times to 0.81 times and 0.47 times to 1.50 times respectively, as set out on page 13.

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2.3 Use of Proceeds

Should Shareholders’ approval be given for the Proposed Divestment, MIIF intends to distribute the net proceeds and any excess cash following the settlement of its liabilities to Shareholders by way of the Share Redemption. The net proceeds to be distributed to Shareholders following the Proposed Divestment are estimated to be approximately 8.25 cps. The Share Redemption will lead to the delisting of MIIF from the SGX-ST and its subsequent winding up. The date of the Share Redemption is to be determined but is expected to be on or around 11 September 2015 8.

To this effect, after the completion of the Proposed Divestment, the MIIF Board will, pursuant to bye-law 34 of MIIF’s bye-laws (the “Bye-Laws”), redeem all the issued and outstanding MIIF Shares (except two MIIF shares held by MIMAL ) at the Net Asset Value per share as determined by Bye-Law 34(g). Following the Share Redemption, MIIF will become a shell company without any assets and will be delisted from the SGX-ST. The Share Redemption has been assessed to be the most efficient and timely manner by which to distribute the net proceeds from the Proposed Divestment to Shareholders. Following the Share Redemption and the delisting of MIIF, MIMAL as MIIF’s Manager and only Shareholder will assume responsibility for the winding up of MIIF, including bearing all costs related to the winding up process. MIMAL will resign as the Manager, and the Management Agreement will be terminated, after the delisting of MIIF and such resignation is expected to take effect upon the appointment of a liquidator to carry out the winding up of MIIF.

3 SUMMARY OF THE MIIF BOARD’S RECOMMENDATION

For the reasons set out in this Circular, the MIIF Board recommends that Shareholders vote to approve the Ordinary Resolution relating to the Proposed Divestment at the SGM to be held at 10.30 a.m. on 27 July 2015 at Fairmont Singapore, Raffles City Convention Centre, Canning Room, 80 Bras Basah Road, Singapore 189560.

8 The indicative date of the Share Redemption is based on the completion of the Proposed Divestment taking place on 5 August 2015. The Sale and Purchase Agreement provides for a long stop date of 15 September 2015, by which the completion of the Proposed Divestment must occur. The date of the Share Redemption is indicative only and is subject to change at the absolute discretion of MIIF. MIIF intends to announce the exact date of the Share Redemption as soon as it has been determined, as well as any changes to the indicative date once MIIF becomes aware of such changes. Announcements will be made through SGXNet.

7

Registered Office:

Penboss Building50 Parliament Street

2nd FloorHamilton HM 12

BermudaDirectorsMr. Heng Chiang Meng (Chairman and Independent Director)Mr. Robert Andrew Mulderig (Independent Director)Mrs. Lee Suet Fern (Independent Director)Mr. Philip Jackson (Independent Director)Mr. Alexander Ribaroff (Independent Director)Mr. Francis Pui-Cheun Kwok (Nominated Director, Executive)

3 July 2015

To: The Shareholders of

Macquarie International Infrastructure Fund Limited (“MIIF”)

Dear Sir/Madam

1. INTRODUCTION

1.1 Background

Macquarie International China Holdings Limited (“MICHL”), a wholly-owned subsidiary of MIIF, has an 81.0% effective interest in Hua Nan Expressway (“HNE”) (comprising Phase I and II of the toll road). This interest is held through a 90.0% interest in South China Highway Development (H.K.) Ltd. (“SCHK”) with the remaining 10.0% interest in SCHK held by Topwise Consultants Limited (“Topwise” or the “Purchaser”). SCHK in turn holds a 90.0% interest in HNE, with the remaining 10.0% held by Guangzhou Centre for Administration of Municipal & Gardening Works (“Guangzhou Centre”), a Guangzhou government entity.

HNE Ownership Structure

HNE was established in 1996 as a co-operative joint venture between the Guangzhou government and SCHK. HNE owns the rights to operate and collect tolls until April 2026. At the end of this period, all the assets of HNE (excluding cash) and the “rights to operate” shall be transferred to the Guangzhou government without compensation.

8

HNE is a 31-kilometre dual-carriage urban toll road in the city of Guangzhou, the capital of Guangdong province in China. It is the main artery for north-south traffic in Guangzhou, enabling easy access to South China and is intersected by eight expressways and urban arteries. HNE is MIIF’s sole remaining investment.

Topwise is a company incorporated under the laws of the British Virgin Islands and an existing shareholder of SCHK. MIIF acquired its 81.0% effective interest in HNE from Topwise and Preciseway Management Ltd in November 2007. Topwise is not related to MIIF, the Manager or its associates.

1.2 The Strategic Review

In October 2012, the board of directors of MIIF (the “MIIF Board” or the “Directors”) announced a strategic review (the “Strategic Review”) to consider a range of alternatives focussed on generating value for shareholders of MIIF (the “Shareholders”). These alternatives included, inter alia, the continuation of MIIF in its existing form, the revision of MIIF’s investment mandate, the changing of MIIF’s structure and its listing jurisdiction, asset divestments, the winding up of MIIF, and capital returns. The objective of the Strategic Review was to formulate strategies that in the MIIF Board’s opinion were in the best interests of Shareholders.

On 18 December 2012, the MIIF Board announced the completion of the Strategic Review and outlined that the following initiatives should be undertaken in order to maximise value for Shareholders:

distribute existing excess cash to Shareholders as a one-off special dividend;

allow MIIF’s corporate-level debt facility to lapse upon maturity and not renew such debt facility;

pursue the orderly divestments of MIIF’s interests in Taiwan Broadband Communications (“TBC”), HNE, Changshu Xinghua Port (“CXP”) and Miaoli Wind;

distribute the proceeds from any divestments to Shareholders as soon as practicable; and

amend the management fee arrangement with the Manager, to better align the interests of MIIF and the Manager,

(together, the “MIIF Initiatives”).

With the receipt of Shareholders’ endorsement of the MIIF Initiatives, the MIIF Board has implemented a number of actions in line with the MIIF Initiatives, including the:

divestment of MIIF’s 47.5% interest in TBC via an initial public offering of Asian Pay Television Trust on the SGX-ST on 29 May 2013. MIIF distributed 45.4 cps as a return of capital to Shareholders;

divestment of MIIF’s 38.0% effective interest in CXP to Pan-United Infrastructure Pte. Ltd. and Petroships Investment Pte Ltd on 25 September 2013. MIIF distributed 9.7 cps as a return of capital to Shareholders; and

divestment of MIIF’s 100.0% interest in Miaoli Wind to Challenger Emerging Market Infrastructure Fund Pte Ltd on 14 November 2013 for a total cash consideration of NT$2.25 million (S$94,768).9

HNE is the sole remaining investment in MIIF’s portfolio and the MIIF Board has been evaluating options to divest MIIF’s entire interest in HNE and return the divestment proceeds to Shareholders in a timely manner. Assuming that HNE is successfully divested, this would complete the MIIF Initiatives and in turn, lead to the delisting of MIIF from the Main Board of the Singapore Exchange Securities Trading Limited (the “SGX-ST”) and its subsequent winding up.

9 S$:NT$ exchange rate is based on a rate of S$1:NT$23.7421 as at 19 June 2013.

9

2. THE PROPOSED DIVESTMENT

2.1 Background

In line with the strategy to maximise value for Shareholders, MIIF initiated a formal sales process for HNE with the advice of Citigroup Global Markets Asia Limited (“Citi”). During this period, MIIF and Citi conducted an extensive global sales process with approaches made to potential third party purchasers. In addition, MIIF also separately approached Topwise, the existing co-shareholder of SCHK, with regard to a potential sale of MIIF’s interest in SCHK to Topwise.

On 15 May 2015, MIIF announced it had agreed to sell its entire interest in SCHK to Topwise for a total cash consideration of S$110.0 million (the “Consideration”)10. The MIIF Board believes that the divestment of MIIF’s entire interest in SCHK to Topwise (the “Proposed Divestment”) provides the best value for Shareholders and allows for a timely exit of the investment in HNE. The Proposed Divestment represents the best offer received by MIIF. The Proposed Divestment constitutes a major transaction for MIIF as defined in Chapter 10 of the Listing Manual of the SGX-ST (the “Listing Manual”) for which Shareholders’ approval will need to be sought.

Accordingly, this Circular seeks Shareholders’ approval for MIIF, through its wholly-owned subsidiary MICHL, to divest its entire 90.0% interest in SCHK (the “Disposed Interest”) to Topwise. Topwise is an existing shareholder of SCHK with an interest of 10.0%. Should Shareholders’ approval be given for the Proposed Divestment, MIIF intends to distribute the net proceeds and any excess cash following the settlement of its liabilities to Shareholders by way of a redemption of ordinary shares in the capital of MIIF (the “Share Redemption”).

2.2 Rationale and Benefits of the Proposed Divestment

The rationale and benefits of the Proposed Divestment are set out below:

2.2.1 Realisation of Strategy to Maximise Value

The Proposed Divestment is in line with the strategy to maximise value for Shareholders announced by the MIIF Board in December 2012 and endorsed by Shareholders in March 2013.

Assuming the Proposed Divestment completes, MIIF intends to distribute the net proceeds of approximately 8.25 cps to Shareholders by way of the Share Redemption. As a result, MIIF would have delivered net proceeds from the divestment of TBC, CXP, Miaoli Wind and HNE (including excess cash) of 66.411 cps to Shareholders, which is 24.0% higher than MIIF’s share price of 53.5 cps when the Strategic Review was first announced on 10 October 2012. The 24.0% premium is similar based on the 1 month, 3 month and 6 month volume weighted average price (“VWAP”) prior to the announcement of the Strategic Review, as set out in the table below.

Share price on

9 Oct 2012

1 month VWAP

prior to 10 Oct 2012

3 month VWAP


6 month VWAP


Share Price (cps) 53.5 53.4 53.8 53.8

Net proceeds (including excess cash) to Shareholders to date (cps)

58.1 58.1 58.1 58.1

Net proceeds (including excess cash) to Shareholders from Proposed Divestment of HNE (cps)

8.25 8.25 8.25 8.25

Total Net Proceeds to Shareholders (including excess cash) (cps)

66.4 66.4 66.4 66.4

10 Transaction costs have not been deducted from the Consideration.

11 Excludes ordinary dividends paid from 10 October 2012 to date.

10

Share price on

9 Oct 2012

1 month VWAP


3 month VWAP


6 month VWAP


Premium vs. Share Price (%) 24.0 24.2 23.2 23.3

Ordinary dividends paid from 10 October 2012 to date (cps)

5.15 5.15 5.15 5.15

Total Return to Shareholders (%) 33.6 33.8 32.8 32.9

Furthermore, the proceeds12 (“Divestment Proceeds” or “Sale Proceeds”) from the divestment of TBC, CXP, Miaoli Wind and HNE are estimated to be S$719.4 million, which is approximately S$24.5 million higher than the threshold level of S$694.9 million (the “Threshold”) approved by Shareholders as part of the management fee revisions in March 2013. As a result of realising Divestment Proceeds of approximately S$719.4 million from the divestments for Shareholders and completing the MIIF Initiatives, a Success Fee of approximately S$17.4 million will be payable to the Manager. The Management Agreement between MIIF and MIMAL dated 19 May 2005 was amended, with the approval of Shareholders in the MIIF annual general meeting held on 8 March 2013, to provide for the payment of the Success Fee to MIMAL.

The Proposed Divestment and Share Redemption would complete the MIIF Initiatives which commenced in 2013 and in turn, lead to the delisting of MIIF from the SGX-ST and its subsequent winding up.

2.2.2 Best Offer to Shareholders following an Extensive Sales Process

In September 2013, MIIF appointed Citi to advise on a formal sales process of HNE. MIIF and Citi conducted an extensive global sales process with approaches made to third party purchasers. The diagrams below set out the proportional representation of the potential purchasers approached by MIIF and Citi.

Potential Purchasers by Type Potential Purchasers by Geography

Strategic 46.6%

Financial 53.4%

North America

8.2%

Europe 12.3%

Greater China 47.9%

South & South East Asia 28.8%

Australia 2.7%

12 “Sale Proceeds” is referred to in the Management Agreement (as defined herein) as the Singapore dollar equivalent of the proceeds from all or part of the divestment of CXP, HNE, TBC and Miaoli Wind, less:


if, in the period after 31 December 2012 and prior to the date of its divestment, the businesses (TBC, CXP, Miaoli Wind and HNE) being divested breaches its distribution policy such that cash that could otherwise have been distributed is instead retained by the businesses or utilised by the businesses to make voluntary unscheduled debt repayments, any cash amounts that would have been received by MIIF, had the businesses adhered to its distribution policy.

11

In addition, MIIF also separately approached Topwise, the existing co-shareholder of SCHK, with regard to a potential sale of MIIF’s interest in SCHK to Topwise. Following this process, MIIF entered into negotiations with Topwise in relation to the Proposed Divestment. The MIIF Board considers that the Proposed Divestment to Topwise represents the best offer to Shareholders.

As an existing shareholder of HNE , Topwise does not require any due diligence on HNE. Accordingly, the Proposed Divestment will not be subject to the conditions typically expected from other third party purchasers and includes only limited representations and warranties.

2.2.3 Fair and Reasonable Valuation

The Consideration of S$110.0 million for the Proposed Divestment was negotiated on a “willing-purchaser, willing-seller” basis, after taking into consideration:

a) the extensive sales process undertaken by MIIF as outlined in paragraph 2.2.2;

b) the Directors’ valuation of HNE as at 31 December 201413;

c) the recent trading multiples for listed toll roads;

d) the level of execution certainty; and

e) the attractiveness of pursuing the divestment of HNE versus retaining the asset and thereby continuing MIIF in its current form.

Directors’ valuation of HNE as at 31 December 2014

MIIF’s 31 December 2014 valuation of HNE was S$120.2 million. This valuation utilised a variety of established valuation techniques, including discounted cash flows, and assumptions that were based on market conditions at that time, and was reviewed and endorsed by MIIF’s audit and risk committee and the MIIF Board. The Consideration is at a slight discount of 8.5% to the 31 December 2014 valuation.

Trading Multiples for Comparable Companies

KPMG Corporate Finance Pte Ltd (“KPMG”) was appointed as the independent financial adviser to the MIIF Board in relation to the Proposed Divestment. Based on the considerations set out in the IFA Letter I (as defined herein), KPMG is of the opinion that the Proposed Divestment is fair and reasonable to MIIF and its Shareholders. The IFA Letter I is reproduced as Appendix II of this Circular.

The Consideration was benchmarked by KPMG against the trading multiples of Broadly Comparable Companies (as defined herein) as at the Latest Practicable Date. The Consideration implies a historical EV (as defined herein) per remaining concession/EBITDA (as defined herein) multiple of 0.53 times and EV per remaining concession/free cash flow14 of 0.66 times, which are both within the range of market comparables. The following table presents the trading multiples of comparable toll roads.

13 Valuation of HNE as at 31 December 2014 of S$120.2 million reflects the latest published valuation of HNE prior to the signing of the Sale and Purchase Agreement (as defined herein).

14 Free cash flow is a measure of financial performance calculated as operating cash flow minus capital expenditures.

12

Company

Market Cap

(RMBm)

Enterprise Value

(RMBm)

LTM EBITDA (RMBm)

LTM FCF (RMBm)

Average remaining

concession (Years)

EV per remaining

concession / LTM EBITDA

EV per remaining

concession / LTM FCF

Anhui Expressway Co. Ltd. 20,493 22,723 1,813 1,527 15.4 0.81 x 0.96 x

Guangdong Provincial Expressway Development Co. Ltd.

6,977 12,805 978 645 17.2 0.76 x 1.16 x

Fujian Expressway Development Company Limited

17,674 25,712 2,225 1,492 14.4 0.80 x 1.20 x

Jiangsu Expressway Co. Ltd. 47,658 51,286 4,457 2,382 14.3 0.80 x 1.50 x

Hopewell Highway Infrastructure Limited

9,478 14,028 1,575 (1,039) 18.2 0.49 x n.a.

Shenzhen Expressway Co., Ltd.

17,302 25,149 2,626 2,259 13.1 0.73 x 0.85 x

Sichuan Expressway Company Limited

19,443 30,438 2,262 (1,599) 19.6 0.69 x n.a.

Zhejiang Expressway Co. Ltd.

36,942 38,544 4,658 3,402 14.1 0.59 x 0.80 x

Yuexiu Transport Infrastructure Limited

7,840 13,604 1,670 952 17.3 0.47 x 0.83 x

China Merchants Holdings (Pacific) Limited

5,788 10,083 1,287 1,585 13.4 0.58 x 0.47 x

Min 13.1 0.47 x 0.47 x

Max 19.6 0.81 x 1.50 x

Offer Price for HNE 2,740 474 380 11.0 0.53 x 0.66 x

Execution Certainty

Any divestment, including a trade sale would be subject to execution risks from factors including due diligence, transaction conditions and representations and warranties expected by purchasers.

As Topwise is an existing shareholder of HNE, it does not require any due diligence and accordingly, the Proposed Divestment will not be subject to the conditions typically expected from other third party purchasers and includes only limited representations and warranties. The limited representations are important as it ensures that there is minimal residual liability to MIIF after the Proposed Divestment given that MIIF intends to distribute the net proceeds and any excess cash following the transaction and will be wound up post the transaction.

The Proposed Divestment to Topwise is expected to provide Shareholders with execution certainty.

Comparison to retaining HNE and thereby continuing MIIF in its current form

If the Proposed Divestment does not complete, MIIF will retain its ownership of HNE and be a single asset fund. In this situation, with HNE as the sole investment, it would be expected that MIIF would pay out as ordinary dividends to Shareholders the majority of normal distributions that it receives from HNE subject to prudent reserves to ensure that MIIF remains solvent and that its fund operating costs are adequately provided.

KPMG in the IFA Letter I has undertaken an analysis of the estimated dividends per share that Shareholders might otherwise receive if HNE was retained thereby continuing MIIF in its current form. Based on an 85.0% dividend payout ratio of MIIF’s estimated dividends on an undiscounted

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basis, it would take approximately seven to eight years for Shareholders to realise the estimated net proceeds of 8.25 cps, which equates to the estimated net proceeds to be distributed to Shareholders should the Proposed Divestment complete.

In addition, the analysis is based on the current expectations of the performance of HNE. As such, Shareholders would continue to be subjected to risks associated with the operations of a business such as regulatory, market and financial risks, which may alter the outcome of the estimated dividend payout potential of MIIF.

2.3 Use of Proceeds

Should Shareholders’ approval be given for the Proposed Divestment, MIIF intends to distribute the net proceeds and any excess cash following the settlement of its liabilities to Shareholders by way of the Share Redemption. The liabilities relate to: (i) operating expenses including base management fees, directors’ fees and other operating expenses from 1 April 2015 until the delisting of MIIF, (ii) transaction costs relating to the Proposed Divestment and (iii) Success Fee payable to MIMAL in accordance with the Management Agreement approved by Shareholders in March 2013. The net proceeds to be distributed to Shareholders following the Proposed Divestment are estimated to be approximately 8.25 cps. The Share Redemption will lead to the delisting of MIIF from the SGX-ST and its subsequent winding up. The date of the Share Redemption is to be determined but is expected to be on or around 11 September 2015 15.

S$ million

Consideration from the Proposed Divestment of HNE 110.0

Plus: MIIF excess cash 4.9

Less: Transaction costs arising from the Proposed Divestment of HNE (1.9)16

Less: Expected working capital requirements up to the point of delisting (0.8)

Less: Success Fee payable to the Manager (17.4)

Net Proceeds 94.8

Shares outstanding as at 14 May 2015 (million) 1,149.9

Net Proceeds (cps) 8.25

To this effect, after the completion of the Proposed Divestment, the MIIF Board will, pursuant to bye-law 34 of MIIF’s bye-laws (the “Bye-Laws”), redeem all the issued and outstanding MIIF Shares (except two MIIF Shares held by Macquarie Infrastructure Management (Asia) Pty Limited (“MIMAL” or the “Manager”)) at the Net Asset Value per share as determined by Bye-Law 34(g). Following the Share Redemption, MIIF will become a shell company without any assets and will be delisted from the SGX-ST. The Share Redemption has been assessed to be the most efficient and timely manner by which to distribute the net proceeds from the Proposed Divestment to Shareholders. Following the Share Redemption and the delisting of MIIF, MIMAL as MIIF’s Manager and only Shareholder will assume responsibility for the winding up of MIIF including bearing all costs and liabilities related to this process. MIMAL will resign as the Manager, and the Management Agreement will be terminated, after the delisting of MIIF and such resignation is expected to take effect upon the appointment of a liquidator to carry out the winding up of MIIF.

15 The indicative date of the Share Redemption is based on the completion of the Proposed Divestment taking place on 5 August 2015. The Sale and Purchase Agreement provides for a long stop date of 15 September 2015, by which the completion of the Proposed Divestment must occur. The date of the Share Redemption is indicative only and is subject to change at the absolute discretion of MIIF. MIIF intends to announce the exact date of the Share Redemption as soon as it has been determined, as well as any changes to the indicative date once MIIF becomes aware of such changes. Announcements will be made through SGXNet.

16 Relates to the unpaid portion of transaction costs amounting to S$2.1 million arising from the Proposed Divestment.

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KPMG has also been appointed as the independent financial adviser to the MIIF Board in relation to the Share Redemption. Based on the considerations set out in the IFA Letter II (as defined herein), KPMG is of the opinion that the Share Redemption Price (as defined herein) has been derived in accordance with the relevant formula and assumptions and that such assumptions are reasonable. The IFA Letter II is reproduced as Appendix III of this Circular.

2.4 Major Transaction

The relative figures in relation to the Proposed Divestment, computed on the applicable bases set out in Rule 1006 of the Listing Manual (“Rule 1006”), are as follows:

Rule1006 Bases Relative Figures (%)(1)

(a) Net asset value of MIIF’s interest in HNE, compared with the MIIF Group’s (as defined herein) net asset value

108.7%(1)

(b) Net profits attributable to MIIF’s interest in HNE compared with the MIIF Group’s net profits

Not applicable(2)

(c) Aggregate value of the consideration received for the Proposed Divestment compared with MIIF’s market capitalisation based on the total number of issued MIIF Shares excluding treasury shares

113.9%(3)

(d) Number of equity securities issued by MIIF as consideration for an acquisition, compared with the number of equity securities previously in issue

Not applicable

(e) Aggregate volume or amount of proved and probable reserves to be disposed of, compared with the aggregate of the MIIF Group’s proved and probable reserves

Not applicable

Notes:

(1) Based on MIIF’s latest announced results for the period ended 31 March 2015.

(2) Not applicable as the net losses before tax, non-controlling interests and exceptional items attributable to MIIF’s interest in HNE for the three months ended 31 March 2015 is S$10.2 million.

(3) MIIF’s market capitalisation is based on 1,149,857,154 MIIF Shares in issue as at 14 May 2015 at a volume weighted average price of S$0.084 at the close of trading on 14 May 2015 for each MIIF Share.

As the relative figures under Rules 1006(a), (b) and (c) exceed 20.0%, the Proposed Divestment constitutes a major transaction for MIIF as defined in Chapter 10 of the Listing Manual for which Shareholder approval will need to be sought.

2.5 Terms of the Proposed Divestment

On 14 May 2015, MICHL entered into a sale and purchase agreement (the “Sale and Purchase Agreement”) with Topwise pursuant to which MIIF (via MICHL) will sell its entire 90.0% interest in SCHK to Topwise.

The Consideration of S$110.0 million was negotiated on a “willing-purchaser, willing-seller” basis and represents the best offer received by MIIF following an extensive global sales process conducted by MIIF. In addition, KPMG, the independent financial adviser in relation to the Proposed Divestment, has opined that the transaction is fair and reasonable to MIIF and its Shareholders.

The Sale and Purchase Agreement and the Proposed Divestment are conditional upon, inter alia, receipt of Shareholders’ approval at the SGM (as defined herein). The key terms of the Sale and Purchase Agreement are set out in Appendix I of this Circular. A copy of the Sale and Purchase Agreement is available for inspection as described in paragraph 12 of this Circular.

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2.6 Asset Values

As at 31 March 2015, the book value of MIIF’s interest in HNE is at the Consideration of S$110.0 million which is based on the Sale and Purchase Agreement.

Prior to the signing of the Sale and Purchase Agreement, the book value, the carrying value and NTA (as defined herein) value of MIIF’s interest in HNE as at 31 December 2014 was S$120.2 million. Based on the valuation of MIIF’s interest in HNE prior to the signing of the Sale and Purchase Agreement, the Consideration represents a loss of S$10.2 million to MIIF.

As at 31 March 2015, HNE represents 95.3% of MIIF’s portfolio by value.

2.7 Losses

The net losses before tax, non-controlling interests and exceptional items attributable to HNE for the three months ended 31 March 2015 is S$10.2 million 17.

3. ILLUSTRATIVE FINANCIAL EFFECTS OF THE PROPOSED DIVESTMENT

The financial effects of the Proposed Divestment on the share capital, NTA per share of the MIIF Group, the earnings per share of the MIIF Group and the gearing at MIIF level, based on the audited financial statements of the MIIF Group for the year ended 31 December 2014 are set out below. The financial statements of the MIIF Group for the year ended 31 December 2014 were audited by MIIF’s auditor.

Share Capital

The Proposed Divestment will not have any impact on the issued share capital of MIIF.

NTA

Assuming that the Proposed Divestment had been completed on 31 December 2014, the effect on the NTA per MIIF Share on a consolidated basis as at 31 December 2014 would be as follows:

Before the Proposed

Divestment

After the Proposed

Divestment

NTA (S$’000) 130,114 100,401

MIIF Shares in issue on 31 December 2014 (’000) 1,149,857 1,149,857

NTA per MIIF Share (on a consolidated basis) (S$) 0.11 0.09

The decrease in NTA per MIIF Share on a consolidated basis from the Proposed Divestment is the result of:

the Consideration being S$10.2 million lower than the valuation of HNE as at 31 December 2014 of S$120.2 million; and

the accruals of the estimated Success Fee of S$17.4 million and estimated transaction costs of S$2.1 million relating to the Proposed Divestment.

17 As disclosed in its “Review of Net Income on an Adjusted Basis”, page 7 of MIIF’s SGX Quarterly Report for the quarter ended 31 March 2015 and “Review of Net Assets and Statements of Financial Position as at 31 March 2015”, page 24 of MIIF’s SGX Quarterly Report for the quarter ended 31 March 2015.

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Earnings

Assuming that the Proposed Divestment had been completed on 1 January 2014, the effect on the earnings per MIIF Share on a consolidated basis for the year ended 31 December 2014 would be as follows:

Before the Proposed

Divestment

After the Proposed

Divestment

Loss after tax attributable to owners of the parent (S$’000) (32,836) (62,549)

Weighted average number of MIIF Shares in issue (’000) 1,149,857 1,149,857

Earnings per MIIF Share (on a consolidated basis) (S$) (0.029) (0.054)

The decrease in earnings per MIIF Share on a consolidated basis from the Proposed Divestment is mainly due to:

the reversal of the loss on valuation of HNE in FY2014 (as defined herein) of S$22.6 million, being more than offset by;

the S$32.8 million loss recorded on the Proposed Divestment of MIIF’s interest in HNE at the Consideration amount of S$110.0 million, and

the accruals of the estimated Success Fee of S$17.4 million and estimated transaction costs of S$2.1 million relating to the Proposed Divestment.

Gearing at MIIF level

The Proposed Divestment would not have any impact on the gearing at MIIF level as there is no debt at MIIF level.

4. TAXATION

The following is a discussion on certain Singapore and Bermuda tax consequences arising from the Share Redemption. This discussion is based upon laws, regulations, rulings and decisions now in effect, all of which are subject to change (possibly with retroactive effect). While this discussion is considered to be the correct interpretation of existing laws in force as at the date of this Circular, no assurance can be given that courts or fiscal authorities responsible for the administration of such laws will agree with the interpretation taken or that changes in such laws will not occur.

The statements made herein do not purport to be a comprehensive or exhaustive description of all tax considerations that may be relevant to the Share Redemption and do not address the tax treatment of investors subject to specific rules.

Recipients of this Circular and all Shareholders should consult their own tax advisors concerning the application of Singapore income tax law to their particular situations as well as any consequences of the Share Redemption under the laws of any taxing jurisdiction. It is emphasised that neither MIIF, the MIIF Board nor any other persons involved in the Share Redemption accept responsibility for any tax effects or liabilities resulting from the Share Redemption.

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4.1 Singapore Tax Implications

4.1.1 Share Redemption

The Share Redemption will be facilitated by way of a reduction of the share capital account and the share premium account of MIIF. No profits have been transferred to the share premium account. Accordingly, no part of the redemption proceeds will be a dividend.

To the extent the redemption proceeds is a return of capital to the Singapore investors, there should be no adverse Singapore tax implications, as the return of capital by MIIF to Shareholders is generally regarded as capital in nature and is not subject to Singapore income tax.

However, to the extent the redemption proceeds are over and above the cost of the MIIF Shares held by the Shareholders, the tax consequences for Singapore resident investors depends on whether they hold their shares on income or capital account. There are no specific laws or regulations which deal with characterisation of whether an income is capital in nature or trading in nature, however there is an exemption available for disposals made by a Singapore resident company till 31 May 2017, in case immediately prior to the date of ordinary shares disposal, the Singapore resident company had held a minimum shareholding of 20.0% of the ordinary shares in MIIF for a continuous period of at least 24 months.

In case the excess redemption proceeds are treated to be capital gains, then there would be no adverse Singapore tax implications as Singapore does not impose tax on capital gains.

However, if the excess redemption proceeds are considered as trading income derived by the Singapore investors, then gains arising from the redemption of MIIF shares may be construed to be in the nature of income and subject to Singapore income tax.

4.1.2 Stamp Duty

There should be no Singapore stamp duty levied on the Share Redemption.

4.1.3 Goods and Service Tax

There should be no Singapore goods and service tax levied on the proceeds received from the Share Redemption.

4.2 Bermuda Tax Implications

There is currently no Bermuda income tax, capital gains tax, stamp duty and withholding tax applicable to MIIF.

5. OPINION OF THE INDEPENDENT FINANCIAL ADVISER IN RELATION TO THE PROPOSED DIVESTMENT

KPMG has been appointed as the independent financial adviser to the MIIF Board in relation to the Proposed Divestment and Share Redemption. Based on the considerations set out in the IFA Letter I and IFA Letter II, KPMG is of the opinion that the Proposed Divestment is fair and reasonable to MIIF and its Shareholders and the Share Redemption Price has been derived in accordance with the relevant formula and assumptions and that such assumptions are reasonable. The IFA Letter I and the IFA Letter II are reproduced as Appendix II and Appendix III, respectively, of this Circular.

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6. INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS

6.1 Directors

As at the Latest Practicable Date (as defined herein), the interests of the Directors in MIIF Shares as recorded in the Register of Directors’ Shareholdings are as follows:

Directors

Number of MIIF Shares

Direct Interest %(1) Deemed Interest %(1)

Heng Chiang Meng 4,053,797 0.35 - -

Robert Andrew Mulderig 670,000 0.06 - -

Lee Suet Fern 300,000 0.03 - -

Philip Jackson - - - -

Alexander Ribaroff - - - -

Francis Pui-Cheun Kwok - - - -

Note:

(1) Based on the total number of 1,149,857,154 issued MIIF Shares as at the Latest Practicable Date.

6.2 Substantial Shareholders

As at the Latest Practicable Date, the interests of the Substantial Shareholders (as defined herein) in MIIF Shares as notified to MIIF are as follows:

Substantial Shareholders

Number of MIIF Shares

Direct Interest %(1) Deemed Interest %(1)

Macquarie Infrastructure Management (Asia) Pty Limited

106,776,610 9.29 - -

Note:

(1) Based on the total number of 1,149,857,154 issued MIIF Shares as at the Latest Practicable Date.

6.3 Disclosure of Interest

None of the Directors and Substantial Shareholders (other than in his or her or its capacity as a Shareholder) has any interest, direct or indirect, in the Proposed Divestment.

7. DIRECTORS’ RECOMMENDATIONS

In line with the MIIF Initiatives and after evaluating the Proposed Divestment against the outcome of the extensive global sales process, the results of the evaluation of the Proposed Divestment conducted by KPMG, as well as considering the rationale and the benefits of the Proposed Divestment, the Directors are of the opinion that the Proposed Divestment is in the best interests of MIIF and its Shareholders. Accordingly, the Directors recommend that Shareholders vote at the SGM in favour of the Ordinary Resolution relating to the Proposed Divestment.

In giving the above recommendations, the Directors have not had regard to the general or specific investment objectives, financial situation, tax position or unique needs and constraints of any individual Shareholder. As each Shareholder would have different investment objectives and profiles, the Directors recommend that any individual Shareholder who may require specific advice in relation to his investment portfolio should consult his stockbroker, bank manager, solicitor, accountant, tax adviser or other professional adviser immediately.

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8. SPECIAL GENERAL MEETING

The SGM, notice of which is enclosed with this Circular, will be held at 10.30 a.m. on 27 July 2015 at Fairmont Singapore, Raffles City Convention Centre, Canning Room, 80 Bras Basah Road, Singapore 189560 for the purpose of considering and, if thought fit, passing with or without modifications, the Ordinary Resolution relating to the Proposed Divestment set out in the Notice of SGM.

9. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors collectively and individually accept full responsibility for the accuracy of the information given in this Circular and confirm after making all reasonable enquiries that, to the best of their knowledge and belief, this Circular constitutes full and true disclosure of all material facts about the Proposed Divestment, MIIF and its subsidiaries, and the Directors are not aware of any facts the omission of which would make any statement in this Circular misleading.

Where information in this Circular has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from those sources and/or reproduced in this Circular in its proper form and context.

10. ADVICE TO SHAREHOLDERS

Shareholders who are in any doubt as to the action that they should take should consult their stockbroker, bank manager, solicitor, accountant or other professional adviser immediately.

11. CONSENT

KPMG has given and has not withdrawn its written consent to the issue of this Circular with the inclusion of its name and the IFA Letter I and the IFA Letter II, and all references thereto, in the form and context in which they are included in this Circular.

12. DOCUMENTS ON DISPLAY

A copy of the Sale and Purchase Agreement is available for inspection during normal business hours at the registered office of MIIF at Penboss Building, 50 Parliament Street, 2nd Floor, Hamilton HM 12, Bermuda and the offices of Allen & Gledhill LLP at One Marina Boulevard #28-00, Singapore 018989 from the date of this Circular up to and including the date falling three months after the date of this Circular.

Yours faithfullyFor and on behalf ofMacquarie International Infrastructure Fund Limited

Heng Chiang MengChairman

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GLOSSARY

In this Circular, the following definitions apply throughout unless otherwise stated:

“Broadly Comparable Companies” Listed companies with operating businesses that are broadly comparable with the business of HNE

“Bye-Laws” MIIF’s bye-laws

“CAGR” Compound annual growth rate

“CDP” The Central Depository (Pte) Limited

“China” The People’s Republic of China

“CIMB” CIMB Bank Berhad, Singapore Branch

“Citi” Citigroup Global Markets Asia Limited

“Completion” The completion of the sale and purchase of MICHL’s 90.0% interest in SCHK

“Consideration” The consideration for the Proposed Divestment, being S$110.0 million

“cps” Singapore cents per share

“CXP” Changshu Xinghua Port

“Disposed Interest” MICHL’s entire 90.0% interest in SCHK

“Divestment Proceeds” or “Sale Proceeds”

The Singapore dollar equivalent of the proceeds from all or part of the divestment of CXP, HNE, TBC and Miaoli Wind, less:


if, in the period after 31 December 2012 and prior to the date of its divestment, the businesses (TBC, CXP, Miaoli Wind and HNE) being divested breaches its respective distribution policy such that cash that could otherwise have been distributed is instead retained by the businesses or utilised by the businesses to make voluntary unscheduled debt repayments, any cash amounts that would have been received by MIIF, had the businesses adhered to its respective distribution policy

as referred to in the Management Agreement

“EBITDA” Earnings before (i) interest and other financial costs, (ii) taxation, and (iii) depreciation and amortisation

“EV” Enterprise value, calculated as the market capitalisation plus debt, minority interest and preferred shares, minus total cash and cash equivalents

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“FCF” Free cash flow is calculated as operating cash flow minus capital expenditures

“FY2014” Financial year ended 31 December 2014

“HNE” Hua Nan Expressway

“IFA Letter I” The letter from KPMG to the MIIF Board in relation to the Proposed Divestment dated 3 July 2015, reproduced as Appendix II of this Circular

“IFA Letter II” The letter from KPMG to the MIIF Board in relation to the Share Redemption, dated 3 July 2015, reproduced as Appendix III of this Circular

“KPMG” KPMG Corporate Finance Pte Ltd, in its capacity as independent financial adviser to the MIIF Board in relation to the Proposed Divestment and the Share Redemption

“Latest Practicable Date” 25 June 2015, being the latest practicable date prior to the printing of this Circular

“Listing Manual” The listing manual of the SGX-ST

“LTM” Last twelve months

“Management Agreement” The Management Agreement between MIIF and MIMAL dated 19 May 2005, as amended by the Amending Agreement between MIIF and MIMAL dated 26 March 2013, approved by Shareholders in the MIIF annual general meeting held on 8 March 2013

“Miaoli Wind” Miaoli Wind Co., Ltd

“MIIF” Macquarie International Infrastructure Fund Limited

“MIIF Board” or “Directors” The board of directors of MIIF as at the date of this Circular and from time to time

“MIIF Group” MIIF and its subsidiaries

“MIIF Initiatives” Initiatives to be undertaken to maximise value for Shareholders following the completion of the Strategic Review

“MIIF Shares” Ordinary shares of par value S$0.01 per share in the capital of MIIF

“MICHL” Macquarie International China Holdings Limited

“MIMAL” or the “Manager” Macquarie Infrastructure Management (Asia) Pty Limited, in its capacity as the manager of MIIF

“Notice of SGM” The notice convening the SGM enclosed with this Circular

“NT$” or “Taiwan dollars and cents” Taiwan dollar and cents, the lawful currency of Taiwan

22

“NTA” Net tangible assets

“Ordinary Resolution” A resolution that has been passed by at least 50.0% of the votes cast by registered holders of MIIF Shares entitled to vote on the particular resolution before the general meeting

“Proposed Divestment” The proposed divestment by MIIF (through MICHL) of its 90.0% interest in SCHK to the Purchaser

“Rule 1006” Rule 1006 of the Listing Manual

“SCHK” South China Development (H.K.) Ltd.

“Sale and Purchase Agreement” The sale and purchase agreement dated 14 May 2015 entered into by MICHL and the Purchaser in relation to the Proposed Divestment

“Securities Account” Securities accounts maintained by Depositors with CDP, but does not include a securities sub-account maintained with a Depository Agent

“SGM” The special general meeting of Shareholders to be held on 27 July 2015 at 10.30 a.m. to approve the matters set out in the Notice of SGM

“SGX-ST” Singapore Exchange Securities Trading Limited

“Share Redemption” Redemption of ordinary shares in the capital of MIIF to distribute the net proceeds of the Proposed Divestment and any excess cash following the settlement of its liabilities to Shareholders

“Share Redemption Price” The net proceeds, and any excess cash following the settlement of MIIF’s liabilities, to be distributed to Shareholders by way of the Share Redemption on a per MIIF Share basis

“Shareholders” Registered holders of MIIF Shares except that where the registered holder is CDP, the term “Shareholders” shall, in relation to such MIIF Shares, mean the persons whose Securities Accounts with CDP are credited with the MIIF Shares

“Strategic Review” The strategic review initiated by the MIIF Board to consider a range of alternatives focused on generating value for Shareholders

“Substantial Shareholder” A person who has an interest or interests in one or more voting shares of MIIF and the total votes attached to that voting share, or those voting shares, is not less than five per cent. of the total votes attached to all the voting shares in MIIF (excluding treasury shares)

“S$” or “Singapore dollars and cents” Singapore dollars and cents, the lawful currency of the Republic of Singapore

“TBC” Taiwan Broadband Communications

“Topwise” or the “Purchaser” Topwise Consultants Limited

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“VWAP” Volume weighted average price

“%” or “per cent.” Per centum or percentage

The terms “Depositor” and “Depository Agent” shall have the meanings ascribed to them respectively in Section 130A of the Companies Act, Chapter 50 of Singapore.

The term “subsidiary” shall have the meaning ascribed to it in Section 5 of the Companies Act, Chapter 50 of Singapore.

Words importing the singular shall, where applicable, include the plural and vice versa. Words importing the masculine gender shall, where applicable, include the feminine and neuter genders. References to persons shall include corporations.

Any reference in this Circular to any enactment is a reference to that enactment as for the time being amended or re-enacted.

The headings in this Circular are inserted for convenience only and shall be ignored in construing this Circular.

Any reference to a time of day in this Circular is made by reference to Singapore time unless otherwise stated.

Any discrepancy in the tables in this Circular between the listed amounts and the totals thereof is due to rounding.

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APPENDIX I

KEY TERMS OF THE SALE AND PURCHASE AGREEMENT

Consideration. Please refer to paragraph 2. 5 of this Circular.

Deposit. The Purchaser shall pay S$3.0 million as deposit and as part payment of the Consideration.

Terms of Payment. The Consideration, less the deposit (to be paid as described above), is to be paid upon Completion of the sale and purchase of the shares of SCHK pursuant to the Sale and Purchase Agreement.

Conditions Precedent. The Proposed Divestment and the Completion thereof are conditional upon, inter alia, receipt of Shareholder approval for the Proposed Divestment at the SGM.

Termination. If a party to the Sale and Purchase Agreement is in breach of any of its obligations on Completion under the Sale and Purchase Agreement, the other party may, inter alia, terminate the Sale and Purchase Agreement.

Long Stop Date. 15 September 2015.

Representations and Warranties. The Sale and Purchase Agreement contains certain representations and warranties given by MICHL in respect of its ownership of its shares in SCHK free of encumbrance.

A copy of the Sale and Purchase Agreement is available for inspection as described in paragraph 12 of this Circular.

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APPENDIX II

IFA LETTER I

The Board of DirectorsMacquarie International Infrastructure Fund LimitedPenboss Building50 Parliament Street2nd FloorHamilton HM 12Bermuda

3 July 2015

Dear Directors

PROPOSED DIVESTMENT OF 81.0 PER CENT. EFFECTIVE INTEREST IN HUA NAN EXPRESSWAY PHASES I AND II

1. INTRODUCTION

We refer to our engagement to advise the directors of Macquarie International Infrastructure Fund Limited (“Directors”) (“MIIF” or the “Company”) with respect to the divestment of its 81.0 per cent. effective interest in Hua Nan Expressway Phases I and II (“HNE”), details of which are contained in the circular dated 3 July 2015 to the shareholders of MIIF (the “Shareholders”) (the “Circular”), of which this letter forms a part. For the purpose of this letter, capitalised terms not otherwise defined herein shall have the same meaning as given to them in the Circular.

KPMG Corporate Finance Pte Ltd (“KPMG Corporate Finance”) has been appointed as independent financial adviser to state whether the divestment is fair and reasonable to MIIF and its Shareholders. We do not, by this letter, warrant the merits or demerits of the divestment other than to form an opinion with respect to the divestment.

On 15 May 2015, MIIF announced that it had agreed to sell its 81.0 per cent. effective interest in HNE for a total cash consideration of S$110 million (the “Transaction Price”) (the “Divestment”). The 81.0 per cent. effective interest in HNE is owned via a 90.0 per cent. interest in South China Highway Development (H.K.) Ltd (“SCHK”), which in turn owns a 90.0 per cent. interest in Guangzhou South China Highway & Bridge Industry Ltd (“SCGZ”) (the “HNE Interest”).

The Divestment will be made to Topwise Consultants Ltd (“Topwise” or the “Purchaser”), the existing 10.0 per cent. shareholder in SCHK. Topwise is a company incorporated under the laws of the British Virgin Islands and an existing shareholder of SCHK. MIIF acquired its 81.0 per cent. effective interest in HNE from Topwise and Preciseway Management Ltd in November 2007. Topwise is not related to MIIF, or MIIF’s manager, Macquarie Infrastructure Management (Asia) Pty Limited (“MIMAL”), or its associates.

2. TERMS OF REFERENCE

KPMG Corporate Finance was appointed by the Board of MIIF (the “Board”) to advise on the Divestment. We were neither a party to the negotiations in relation to the Divestment, nor were we involved in the deliberations leading up to the decision by the Board to enter into the Divestment and its subsequent actions relating thereof. This letter is addressed to the Directors for their benefit in connection with and for the purposes of their consideration of the Divestment, and any recommendations made by them to the Shareholders shall remain the responsibility of the Directors.

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In rendering our advice and giving our opinion, we did not have regard to the specific investment objectives, financial situation or unique needs and constraints of any Shareholder or any specific group of Shareholders. We recommend that any individual Shareholder or group of Shareholders who may require specific advice in relation to their investment portfolio consult their stockbroker, bank manager, solicitor, accountant, tax adviser or other professional advisers.

Our view is based upon market, economic, industry, monetary, and other conditions in effect on, as well as the information provided to us by the Company, as at 25 June 2015 (the “Latest Practicable Date”). As such conditions can change significantly over a relatively short period of time , we assume no responsibility to update, revise or reaffirm our opinion in the light of any subsequent development after the Latest Practicable Date even if it might affect our opinion contained herein.

The evaluation of the legal, strategic, and/or commercial merits and risks of the Divestment, or on the future growth prospects or earnings potential of MIIF or HNE should the Divestment be completed or not be completed remain the sole responsibility of the Board and the management of MIIF although we may draw upon their views or make such comments in respect thereof (to the extent deemed necessary or appropriate by us) in arriving at our opinion.

We have not conducted a comprehensive independent review of the business, operations or financial condition of MIIF or HNE. Further, the scope of our appointment does not require us to express an opinion on the future prospects of MIIF following the Divestment, should it ultimately occur. We are therefore not expressing any opinion herein as to the prices at which the ordinary shares of MIIF (the “Shares”) may trade upon completion of the Divestment should that occur, or the future performance or liquidation of MIIF. For the avoidance of doubt, we have not made any independent evaluation or appraisal of the assets and liabilities (including without limitation, real properties) of MIIF or HNE.

In formulating our advice and opinion, we have relied to a considerable extent on the information set out in the Circular, other public information collated by us and the information, opinions and facts provided to us by MIIF, and its other professional advisers. We have also relied on the information contained in the various announcements made by MIIF, as well as other public announcements, in relation to the Divestment.

We have relied upon and assumed the accuracy of the relevant information, both written and verbal, provided to us by MIIF. Whilst care has been exercised in reviewing the information we have relied upon, we have not independently verified the accuracy or completeness of such information, whether written or verbal, and accordingly cannot and do not warrant, and do not accept any responsibility for, the accuracy, completeness or adequacy of such information. Nevertheless, we have made such enquiries and judgment as we deemed necessary and have found no reason to doubt the accuracy of such information. We have also relied on the responsibility statement by the Board that the Circular and all documents relating to the Circular have been seen and approved by them and they collectively and individually accept responsibility for the information given, and confirm that, having made all reasonable enquiries, to the best of their knowledge and belief, the facts stated and opinions expressed in the Circular are fair and accurate and that there is no other material fact the omission of which would make any statement in the Circular misleading. Accordingly, no representation or warranty, expressed or implied, is made and no responsibility is accepted by us concerning the accuracy, completeness or adequacy of such information.

This letter is governed by, and construed in accordance with, the laws of Singapore, and is strictly limited to the matters stated herein and does not apply by implication to any other matter. No other person may reproduce, disseminate or quote this letter (or any part thereof) for any other purpose at any time and in any manner except with KPMG Corporate Finance’s prior written consent in each specific case.

Our opinion in relation to the Divestment should be considered in the context of the entirety of our letter and the Circular.

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3. ASSESSMENT OF THE DIVESTMENT

In the course of our assessment of the Divestment, we have given due consideration to, inter alia, the following:

a) Rationale for the Divestment

The rationale and benefits of the Divestment are set out in paragraph 2.2 of the Circular.

b) Assessment of financial model

MIIF has provided a discounted cash flow model for HNE which was prepared by MIIF as at 31 December 2014 (the “MIIF Model”).

We have undertaken an assessment of the MIIF Model, including:

Basic procedures to check the mathematical accuracy of the MIIF Model; however we have neither undertaken a review nor an audit of the projections.

Basic checks as to the assumptions underlying the MIIF Model, including checks on the future revenues, cash flows and the appropriate discount rate used.

Subject to our comments below, nothing has come to our attention that would indicate the assumptions underlying the MIIF Model are unreasonable.

By discounting distributions attributable to the HNE Interest to their present value, the MIIF Model generates a fair value of S$120.2 million for the HNE Interest (“MIIF Valuation”). We note that the Transaction Price is at a discount of 8.5 per cent. to the MIIF Valuation of the HNE Interest as at 31 December 2014.

c) Broadly comparable market data

In our assessment of the Transaction Price, we have also performed benchmarking exercises that relate to listed companies with operating businesses that are broadly comparable with the business of HNE (“Broadly Comparable Companies”).

We have considered, inter alia, the following:

The enterprise value-to-earnings before interest, taxation, depreciation and amortisation (“EV/EBITDA”) multiple. The EV/EBITDA multiple is an appropriate metric in the circumstances as it is unaffected by variances in capital structure from time to time.

The enterprise value-to-free cash flow (“EV/FCF”) multiple. The EV/FCF multiple is derived using the enterprise valuation of a company divided by the free cash flow.

The EV/EBITDA multiples and the EV/FCF multiples have been assessed having regard to the average of the remaining toll road concession periods for each of the Broadly Comparable Companies.

There is no listed company which is identical to HNE in terms of composition of business activities, scale of operations, risk profile, geographical spread of activities, financial condition, track record, future prospects and other relevant criteria. Accordingly, any comparison made with respect to the Broadly Comparable Companies merely serves as an illustrative guide and conclusions drawn from the comparison may not necessarily reflect the perceived market valuation of HNE.

For the reasons articulated above, it should be noted that it would not be appropriate to solely rely on the Broadly Comparable Companies multiples in assessing the Transaction Price.

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CompanyMarket Cap

(RMBm)

Enterprise Value

(RMBm)

LTM EBITDA

(RMBm)(1)LTM FCF (RMBm)(1)

Average remaining

concession (Years)(2)

EV per remaining

concession / LTM

EBITDA(3)

EV per remaining

concession / LTM FCF(3)

Adj EV per remaining

concession / LTM

EBITDA(4)

Adj EV per remaining

concession / LTM FCF(4)

Anhui Expressway Co. Ltd. 20,493.35 22,722.94 1,812.90 1,526.56 15.4 0.81 x 0.96 x 0.72 x 0.85 x


6,976.55 12,805.49 977.70 645.24 17.2 0.76 x 1.16 x 0.71 x 1.07 x


17,673.94 25,712.04 2,224.60 1,491.77 14.4 0.80 x 1.20 x 0.73 x 1.09 x

Jiangsu Expressway Co. Ltd. 47,658.16 51,285.94 4,456.70 2,382.09 14.3 0.80 x 1.50 x 0.70 x 1.32 x


9,477.96 14,027.96 1,575.00 (1,039.15) 18.2 0.49 x n.a. 0.45 x n.a.


17,302.21 25,149.27 2,626.41 2,258.64 13.1 0.73 x 0.85 x 0.66 x 0.77 x


19,443.26 30,437.59 2,262.00 (1,598.75) 19.6 0.69 x n.a. 0.63 x n.a.


36,942.01 38,543.80 4,657.80 3,402.26 14.1 0.59 x 0.80 x 0.51 x 0.70 x


7,839.51 13,604.14 1,670.15 951.53 17.3 0.47 x 0.83 x 0.44 x 0.76 x


5,788.21 10,083.24 1,287.12 1,585.00 13.4 0.58 x 0.47 x 0.54 x 0.44 x

Min 13.1 0.47 x 0.47 x 0.44 x 0.44 x

Median 14.9 0.71 x 0.91 x 0.65 x 0.81 x

Mean 15.7 0.67 x 0.97 x 0.61 x 0.88 x

Max 19.6 0.81 x 1.50 x 0.73 x 1.32 x

HNE (equity value implied by the MIIF Model)

2,773 464 387 11.0 0.54 x 0.65 x

HNE (equity value implied by the Transaction Price)

2,740 474 380 11.0 0.53 x 0.66 x

Sources: Capital IQ, company consolidated financial statements and company announcements

Notes:

1. LTM EBITDA and LTM FCF are determined based on the preceding twelve-month values from latest available financial statements.

2. Refers to the average of remaining toll road concession periods between the Latest Practicable Date and the respective concession expiry dates.

3. The trading multiples are adjusted to reflect the different concession lengths of the underlying toll roads.

4. Further to the discussion included in Section 4 of this letter, we have applied a discount for lack of marketability to the trading multiples of the Broadly Comparable Companies. According to valuation literature, the marketability discount for majority shareholdings can fall within the range of 10.8 to 15.5 per cent. A discount for lack of marketability of 13.2 per cent., being the mid rate of the abovementioned range has been applied to adjust the trading multiples for HNE’s lack of marketability.

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Company Business Description

Anhui Expressway Co. Ltd.

Anhui Expressway Company Limited is primarily engaged in the construction, operation, management, and development of the toll roads and associated service sections in the Anhui province, the People’s Republic of China. The company owns interests in the Hening Expressway, National T runk 205 T ianchang Section, Xuanguang Expressway, Gaojie Expressway, Lianhuo Expressway Anhui Section, Xuanguang Expressway Nanhuan Section, Ninghuai Expressway Tianchang Section, and Guangci Expressway.


Guangdong Provincial Expressway Development Co., Ltd., through its subsidiaries, is engaged in the construction, tolling, maintenance, and management of expressways, grade highways, and bridges in the People’s Republic of China.


Fujian Expressway Development Company Limited engages in the construction, operation, maintenance, and management of expressways and highways in China. The company operates expressways within Fujian Province, such as the Quan-Xia Expressway, connecting Quanzhou and Xiamen; the Fu-Quan Expressway, connecting Fuzhou and Quanzhou; and the Luo-Ning Expressway, connecting Luoyuan and Ningde. Fujian Expressway Development Company Limited also engages in toll fees collection business.

Jiangsu Expressway Co. Ltd.

Jiangsu Expressway Company Limited invests, constructs, operates, and manages toll roads and bridges in Jiangsu Province. The company operates the Shanghai-Nanjing expressway, Shanghai-Nanjing Section of G312, Nanjing Section of Nanjing-Lianyungang highway, Guangjing Xicheng expressway, Jiangyin Yangtze bridge, and Sujiahang expressway. It operates approximately 850 kilometers of highways.


Hopewell Highway Infrastructure Limited, an investment holding company, develops, operates, and manages expressways in Guangdong Province, the People’s Republic of China.The company has interests in toll expressway projects in operation consisting of the Guangzhou-Shenzhen Superhighway; and Phases I, II, and III of the Western Delta Route. It is also involved in loan financing activities.


Shenzhen Expressway Company Limited, together with its subsidiaries, invests in, constructs, operates, and manages toll highways, roads, and expressways in the People’s Republic of China. It invests in and operates a total of 16 toll highway projects.


Sichuan Expressway Company Limited, together with its subsidiaries, engages in the investment, construction, operation, and management of road infrastructure projects in Sichuan Province, China. As of December 31, 2014, it had approximately 573 kilometers of completed expressways and approximately 165 kilometers of expressways under construction. The company also engages in property development and operates gas stations along expressways.


Zhejiang Expressway Co., Ltd., an investment holding company, engages in the operation, maintenance, and management of high grade roads in China. It primarily operates and manages Shanghai-Hangzhou-Ningbo Expressway, Shangsan Expressway, and Jinhua Section of the Ningbo-Jinhua Expressway. The company also operates ancillary businesses such as automobile servicing, gas stations and advertising.


Yuexiu T ransport Infrastructure Limited, together with its subsidiaries, is engaged in investing, developing, operating, and managing toll highways, expressways, bridges, and ports primarily in Guangdong Province, the People’s Republic of China. It holds investments in various operating expressways and bridge projects comprising Guangzhou Northern Second Ring Expressway, Guangzhou Western Second Ring Expressway, Guangzhou Northern Ring Road, Guangdong Humen Bridge, Shantou Bay Bridge, and Qinglian Expressway located in the Guangdong Province. As of December 31, 2013, it had a total of 12 investments in operating expressways and bridge projects with a total attributable toll length of approximately 259.1 kilometers.


China Merchants Holdings (Pacific) Limited, an investment holding company, invests in, manages, and operates toll roads in the People’s Republic of China. It operates five toll roads totaling approximately 415 kilometers located in Zhejiang province, Guangxi Zhuang Autonomous Region, and Guizhou province. The company also provides management and technical services in toll road and other infrastructure related businesses.

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We observe that:

The EV per remaining concession/EBITDA multiple for the Transaction is within the range of EV per remaining concession/EBITDA multiples for the Broadly Comparable Companies.

The EV per remaining concession/FCF multiple for the Transaction is within the range of EV per remaining concession/FCF multiples for the Broadly Comparable Companies.

We note that the HNE Interest is in a single asset, whereas all of the Broadly Comparable Companies offer investors access to multiple toll road assets, hence representing differing risk-return profiles to the respective Shareholders.

We have looked for comparable transactions involving similar assets over the last five years but were unable to identify any publicly available information which could be useful for the purpose of analysis.

d) Pro forma financial effects of the Divestment

The pro forma financial effects of the Divestment are set out in section 3 of the Circular.

e) Other relevant considerations

(i) No better offers

MIIF commenced a sales process to divest the HNE Interest in September 2013, retaining the services of a global investment bank and marketing the HNE Interest to more than 70 potential purchasers. During this period, MIIF received interest from third party investors, however, these parties did not progress their interest further by making binding offers for the HNE Interest. Given the limited marketability with third party investors, MIIF entered into negotiations with the Purchaser in relation to the Divestment.

The Board has informed KPMG Corporate Finance that as at the Latest Practicable Date, the Directors and the Company have not been approached with any competing offers for the HNE Interest, nor an enhancement or revision of the Purchaser’s offer.

(ii) Current hypothetical liquidation value versus future dividends

- Current hypothetical liquidation value

In considering current hypothetical liquidation value, Shareholders should note the following costs that will be incurred:

Approximately S$ 1.9 million, payable in respect of the Divestment (“Transaction Costs”).

Approximately S$ 17.4 million, payable to MIMAL (“MIMAL Success Fee”)18.

Although the MIMAL Success Fee is only partially attributable to the sale of the HNE Interest, we note that it will substantially reduce the amount payable to MIIF Shareholders upon completion of the Divestment. We note, however, that the success fee arrangement was revised following the Strategic Review so as to align the interests of MIMAL to maximise value for MIIF Shareholders. This revision was formalised via an amendment to the Management Agreement between MIIF and MIMAL dated 19 May 2005 to provide for the payment of the MIMAL Success Fee to MIMAL, such amendment having received the approval of Shareholders in the MIIF annual general meeting held on 8 March 2013.

18 The MIMAL Success Fee is triggered when total divestment proceeds of S$694.9 million are achieved from the divestment of TBC, HNE, Changshu Xinghua Port and Miaoli Wind. As the divestment proceeds received from the sale of TBC, CXP and Miaoli Wind are S$617.3 million, the threshold level will be met if the divestment proceeds from the sale of HNE exceed S$77.6 million. MIIF’s Shareholders approved the MIMAL Success Fee at the MIIF Annual General Meeting held on 8 March 2013 as part of a broader performance arrangement covering the divestment of TBC, HNE, Changshu Xinghua Port and Miaoli Wind.

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After considering the above costs, the expected working capital requirements up to the point of delisting and MIIF excess cash, the current hypothetical liquidation value per Share would be 8.25 cents , the calculation of which is illustrated below:

Current hypothetical liquidation value S$ million

Transaction Price(1) 110.0

Less:

Transaction Costs(2) (1.9)

Expected working capital requirements up to the point of delisting(3) (0.8)

MIMAL Success Fee (17.4)

Add:

MIIF excess cash(3) 4.9

Current hypothetical liquidation value 94.8

No. of shares outstanding (million) 1149.9

Current hypothetical liquidation value per Share (cents) 8.25

Notes:

1. Transaction Price is assumed to be calculated on a cash-free and debt-free basis.

2. Transaction Costs does not factor in the potential wind-up costs, which will be paid by MIMAL.

3. The MIIF excess cash of S$4.9 million and expected working capital requirement of S$0.8 million are based on management estimates.

- Future dividends

If MIIF retains the HNE Interest, it will continue to receive cash distributions from HNE.

We have compared the payout per Share should the Divestment be completed, against the dividends per Share that the Shareholders might otherwise receive should the HNE Interest be retained.

We note that, on an undiscounted basis and assuming an 85 .0 per cent. dividend payout ratio, it would take approximately seven to eight years for the Shareholders to realise the capital sum accruing from the current hypothetical liquidation value. We note that HNE’s remaining concession period is 11 years.

Our analysis is based on the current projections used in the MIIF Model and therefore does not account for potential changes in HNE’s revenue generating capabilities. We would however like to highlight the following:

Toll roads in the People’s Republic of China are subject to high regulatory risk. By way of recent example:

In early 2012 HNE received notification from the Guangdong Transport Bureau and the Guangdong Price Bureau that the toll rate and toll mechanism used to calculate tolls on all highways in Guangdong Province, including HNE, would be standardised from 1 June 2012. As a result of this directive, the toll rate for HNE Phase I was reduced from an average rate of RMB0.75 per kilometer to RMB0.60 per kilometer, adversely impacting HNE.

In 2011, a new government initiative was introduced to allow vehicles carrying fresh produce to pass through all toll roads for free. In addition, a toll-free travel policy was later introduced in 2012, granting passenger vehicles free access to toll roads during major public holidays.

Any changes in regulations pertaining to ownership, rights of operation and toll rates may negatively impact the future potential cash distributions and value of the HNE Interest.

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The projected distributions are expected to be reduced in the 7 year period from 2015, largely attributable to a debt repayment profile agreed between HNE and its lender.

(iii) Reduced investor coverage

Since commencing divestment of assets in accordance with the Strategic Review findings, there has been a general lack of interest in the Shares of MIIF. This is evident in a reduction in institutional shareholders, a reduction in analyst coverage and significantly reduced liquidity in the Shares. As the only remaining asset of MIIF, it is reasonable to conclude that the HNE Interest will not be afforded significant investor coverage, hence potentially resulting in further reduction in the liquidity of the Shares.

(iv) No certainty of better offer

There is no certainty that MIIF will be able to eventually sell the HNE Interest at a better price than is being currently offered by the Purchaser.

4. OUR OPINION

In arriving at our opinion in respect of the Divestment, we have reviewed and examined all factors which we consider to be pertinent in our assessment, including the following key considerations:

Rationale. We have reviewed the rationale for the Divestment and are of the view that the rationale is being pursued on a reasonable basis.

Financial model. We have undertaken an assessment of the MIIF Model. Nothing has come to our attention that would indicate the assumptions underlying the MIIF Model are unreasonable. We note that the Transaction Price of S$110 million represents a discount of 8.5 per cent. to the MIIF Valuation of S$120.2 million.

Given the difficulties associated with the sale of the HNE Interest, we consider it appropriate to apply a discount for lack of marketability to the MIIF Valuation. According to valuation literature, the marketability discount for majority shareholdings can fall within the range of 10.8 to 15.5 per cent. Thus, although the value implied by the MIIF Model is higher than the Transaction Price, after taking into account the discount for lack of marketability, the Transaction Price is higher than the range of values implied by the adjusted MIIF Valuation.

Broadly Comparable Companies. We note that the Transaction Price falls within the range of values implied by the trading EV per remaining concession/EBITDA and EV per remaining concession/FCF multiples for the Broadly Comparable Companies.

Current hypothetical liquidation value versus future dividends. We have compared the payout per Share should the Divestment be completed, against the dividends per Share that the Shareholders might otherwise receive should the HNE Interest be retained. We note that, on an undiscounted basis and assuming an 85 .0 per cent. dividend payout ratio, it would take approximately seven to eight years for the Shareholders to realise the capital sum accruing from the current hypothetical liquidation value. We note that HNE’s remaining concession period is 11 years.

No certainty of better offer. There is no certainty that MIIF will be able to eventually sell the HNE Interest at a better price than is being currently offered by the Purchaser.

Based on our analysis, and after having carefully considered the information available to us as at the Latest Practicable Date, we are of the opinion that the Sale of the HNE Interest at the Transaction Price of S$110 million is fair and reasonable to MIIF and its Shareholders.

This opinion is addressed to the Directors for their use and benefit, in connection with and for the purpose of their consideration of the Divestment and for inclusion in the Circular.

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In rendering the above opinion, we have not taken into consideration the specific investment objectives, financial situation, tax position or unique needs and constraints of any individual Shareholder. Accordingly, any individual Shareholder who may require specific advice in relation to their investment portfolio, including their investment in MIIF, should consult their stockbroker, bank manager, solicitor, accountant, tax adviser, or other professional adviser immediately.

Yours faithfully

For and on behalf ofKPMG Corporate Finance Pte Ltd

Vishal SharmaExecutive Director

Jeremy BogueDirector

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APPENDIX III

IFA LETTER II

The Board of DirectorsMacquarie International Infrastructure Fund LimitedPenboss Building50 Parliament Street2nd FloorHamilton HM 12Bermuda

3 July 2015

Dear Directors

PROPOSED REDEMPTION OF THE SHARES IN MACQUARIE INTERNATIONAL INFRASTRUCTURE FUND

1. INTRODUCTION

We refer to our engagement to advise the directors of Macquarie International Infrastructure Fund Limited (the “Directors”) (“MIIF” or the “Company”) with respect to the proposed share redemption (the “Share Redemption”) of all the outstanding shares of MIIF (except two MIIF shares held by MIMAL) at the Net Asset Value per share, should the divestment of its 81.0 per cent. effective interest in Hua Nan Expressway Phases I and II (“HNE”) be approved by shareholders of MIIF (the “Shareholders”) and transacted, the details of which are contained in the circular dated 3 July 2015 to the Shareholders (the “Circular”), of which this letter forms a part. For the purpose of this letter, capitalised terms not otherwise defined herein shall have the same meaning as given to them in the Circular.

KPMG Corporate Finance Pte Ltd (“KPMG Corporate Finance”) has been appointed as independent financial adviser to state whether the Share Redemption Price has been derived in accordance with the relevant formula and assumptions, and that these assumptions are reasonable. We do not, by this letter, warrant the merits or demerits of the redemption other than to form an opinion with respect to the Share Redemption.

On 15 May 2015, MIIF announced that it had agreed to sell its 81.0 per cent. effective interest in HNE for a total cash consideration of S$110.0 million (the “Transaction Price”). The 81.0 per cent. effective interest in HNE is held via a 90.0 per cent. interest in South China Highway Development (H.K.) Ltd (“SCHK”), which in turn owns a 90.0 per cent. interest in Guangzhou South China Highway & Bridge Industry Ltd (“SCGZ”) (the “HNE Interest”).

The HNE Interest is MIIF’s sole remaining investment , and should the Proposed Divestment be approved and completed, MIIF’s assets will comprise of only cash (inclusive of the proceeds received from the Proposed Divestment). In such instance, MIIF is proposing to delist and wind-up MIIF in line with its stated strategy, and return the proceeds arising from the Proposed Divestment to MIIF’s Shareholders via the Share Redemption of all the outstanding shares of MIIF at the Net Asset Value per share - except two MIIF shares held by Macquarie Infrastructure Management (Asia) Pt y Limited (the “Manager” or “MIMAL”), as the proposed method of making the final distributions to MIIF’s shareholders.

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2. TERMS OF REFERENCE

KPMG Corporate Finance was appointed by the Board of MIIF (the “Board”) to advise on the Share Redemption. We were neither a party to any negotiations in relation to the Share Redemption, nor were we involved in any deliberations leading up to the decision by the Directors to approve the Share Redemption and its subsequent actions relating thereof. This letter is addressed to the Directors for their benefit in connection with and for the purposes of their consideration of the Share Redemption, and any recommendations made by them to the Shareholders shall remain the responsibility of the Directors.

In rendering our advice and giving our opinion, we did not have regard to the specific investment objectives, financial situation or unique needs and constraints of any Shareholder or any specific group of Shareholders. We recommend that any individual Shareholder or group of Shareholders who may require specific advice in relation to their investment portfolio consult their stockbroker, bank manager, solicitor, accountant, tax adviser or other professional advisers.

Our view is based upon market, economic, industry, monetary, and other conditions in effect on, as well as the information provided to us by the Company, as at 25 June 2015 (the “Latest Practicable Date”). As such conditions can change significantly over a relatively short period of time , we assume no responsibility to update, revise or reaffirm our opinion in the light of any subsequent development after the Latest Practicable Date even if it might affect our opinion contained herein.

The evaluation of the legal, strategic, and/or commercial merits and/or associated risks of the Share Redemption, and any comparisons to any alternative transaction previously considered by MIIF or transactions that MIIF may consider in the future remain the sole responsibility of the Directors and the management of MIIF, although we may draw upon their views or make such comments in respect thereof (to the extent deemed necessary or appropriate by us) in arriving at our opinion.

In formulating our advice and opinion, we have relied to a considerable extent on the information set out in the Circular, other public information collated by us and the information, opinions and facts provided to us by MIIF, and its other professional advisers. We have also relied on the information contained in the various announcements made by MIIF, as well as other public announcements, in relation to the Share Redemption. For the avoidance of doubt, we have not made any independent evaluation or appraisal of the assets and liabilities (including without limitation, real properties if any) of MIIF or HNE.

We have relied upon and assumed the accuracy of the relevant information, both written and verbal, provided to us by MIIF. Whilst care has been exercised in reviewing the information we have relied upon, we have not independently verified the accuracy or completeness of such information, whether written or verbal, and accordingly cannot and do not warrant, and do not accept any responsibility for, the accuracy, completeness or adequacy of such information. Nevertheless, we have made such enquiries and judgment as we deemed necessary and have found no reason to doubt the accuracy of such information. We have also relied on the responsibility statement by the Directors that the Circular and all documents relating to the Circular have been seen and approved by them and they collectively and individually accept responsibility for the information given, and confirm that, having made all reasonable enquiries, to the best of their knowledge and belief, the facts stated and opinions expressed in the Circular are fair and accurate and constitutes a full and true disclosure, in all material respects, of all material facts relating to the Share Redemption and that there is no other material fact the omission of which would make any statement in the Circular inaccurate, incomplete or misleading in any material respect. Accordingly, no representation or warranty, expressed or implied, is made and no responsibility is accepted by us concerning the accuracy, completeness or adequacy of such information.

The Company has also been advised by its own professional advisers in the preparation of the Circular (other than this letter). We have no role or involvement and have not provided any advice, financial or otherwise, whatsoever, in the preparation, review and verification of the Circular (other than this letter). Accordingly, we take no responsibility for and express no views, whether expressed or implied, on the contents of the Circular (other than this letter).

This letter is governed by, and construed in accordance with, the laws of Singapore, and is strictly limited to the matters stated herein and does not apply by implication to any other matter. No other person may reproduce, disseminate or quote this letter (or any part thereof) for any other purpose at any time and in any manner except with KPMG Corporate Finance’s prior written consent in each specific case.

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Our opinion in relation to the Share Redemption should be considered in the context of the entirety of our letter and the Circular.

3. SHARE REDEMPTION

In the course of our assessment of the Share Redemption, we have given due consideration to, inter alia, the following:

(a) Rationale for the Share Redemption

The rationale and benefits of the Share Redemption are set out in paragraph 2.3 of the Circular.

(b) Return of Net Proceeds by way of the Share Redemption

The net proceeds, and any excess cash following the settlement of MIIF’s liabilities, to be distributed to Shareholders by way of the Share Redemption on a per share basis (the “Share Redemption Price”) is to be calculated as follows:

(i) Proceeds arising from sale of HNE Interest (“Transaction Price”);

(ii) Less: Transaction costs arising from the sale of HNE Interest (“Transaction Costs”);

(iii) Less: Expected working capital requirements up to the point of delisting;

(iv) Less: Success Fee payable to MIMAL calculated in accordance with the formula stated within the restated management agreement between MIIF and MIMAL (the “Restated Management Agreement”) approved by Shareholders at the Annual General Meeting held on 8 March 2013; and

(v) Plus: MIIF excess cash.

Calculation of Share Redemption Price S$ million

Transaction Price(1) 110.0

Less:

Transaction Costs(2) (1.9)

Expected working capital requirements up to the point of delisting(3) (0.8)

MIMAL Success Fee (17.4)

Add:

MIIF excess cash(3) 4.9

Current hypothetical liquidation value 94.8

No. of shares outstanding (million) 1149.9

Current Share Redemption Price (cents) 8.25

Notes:

1. Transaction Price is assumed to be calculated on a cash-free and debt-free basis.

2. Transaction Costs does not factor in the potential wind-up costs, which will be paid by MIMAL.

3. The MIIF excess cash of S$4.9 million and expected working capital requirement of S$0.8 million are based on management estimates.

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(c) Calculation of Success Fee

The Success Fee payable to MIMAL is calculated as per the formula stated within the Restated Management Agreement , which was approved by MIIF’s Shareholders at the Annual General Meeting held on 8 March 2013. Whereupon the divestments of MIIF’s 4 assets, namely Taiwan Broadband Communications (TBC), Changshu Xinghua Port (CXP), Miaoli Wind, and Huanan Expressway Phases I and II (HNE) were successfully carried out such that the Divestment Proceeds are equivalent to the Threshold, MIMAL will be entitled to S$15.0 million as its Success Fee for realising on behalf of MIIF’s Shareholders the intrinsic value of the assets at a significant premium above the implied value of MIIF’s businesses as reflected by MIIF’s market capitalisation prior to the announcement of the strategic review on 10 October 2012.

If the Divestment Proceeds exceed the Threshold, MIMAL will be entitled to S$15.0 million plus 10 .0 per cent. of the difference between the Divestment Proceeds and the Threshold as its Success Fee.

KPMG Corporate Finance has reviewed the calculations of the Divestment Proceeds and the Success Fee, and have found them to be in accordance with the formula stated within the Restated Management Agreement.

Calculation of Divestment Proceeds

Assets

Gross Proceeds

(S$m)

Transaction Costs (S$m)

Cash Held Back(S $m)

Divestment Proceeds

(S$m)

TBC 522.1 (0.1) (11.2) 510.8

CXP 112.2 (0.3) (5.5) 106.4

Miaoli Wind 0.1 0.0 0.0 0.1

HNE 110.0 (2.1) (5.8) 102.1

Total 744.4 (2.4) (22.6) 719.4

Aggregate Divestment Proceeds 719.4

Calculation of MIMAL Success Fee

Fees Payable

Tier 1 (Divestment Proceeds = S$694.915m)

S$m 15.0 Nett 15.0

Tier 2 (S$694.915m < Divestment Proceeds < S$731.489m)

% 10% of Tier 2 Divestment Proceeds

2.4

Tier 3 (Divestment Proceeds > S$731.489m)

% 20% of Tier 3 Divestment Proceeds

MIMAL Success Fee 17.4

4. OUR OPINION

Based on our analysis, and after having carefully considered the information available to us as at the Latest Practicable Date, we are of the opinion that the Share Redemption Price has been derived in accordance with the relevant formula and assumptions and that these assumptions are reasonable.

This opinion is addressed to the Directors for their use and benefit, in connection with and for the purpose of their consideration of the Share Redemption and for inclusion in the Circular.

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In rendering the above opinion, we have not taken into consideration the specific investment objectives, financial situation, tax position or unique needs and constraints of any individual Shareholder. Accordingly, any individual Shareholder who may require specific advice in relation to their investment portfolio, including their investment in MIIF, should consult their stockbroker, bank manager, solicitor, accountant, tax adviser, or other professional adviser immediately.

Whilst a copy of this letter may be reproduced in the Circular, no other person may reproduce, disseminate or quote this letter (or any part thereof) for any purpose, other than the intended purpose in relation to the Share Redemption, at any time and in any manner without the prior written consent of KPMG Corporate Finance in each specific case. The opinion is governed by, and construed in accordance with, the laws of Singapore, and is strictly limited to the matters stated herein and does not apply by implication to any other matter.

Yours faithfully

For and on behalf ofKPMG Corporate Finance Pte Ltd

Vishal SharmaExecutive Director

Jeremy BogueDirector

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Disclaimers

Macquarie International Infrastructure Fund Limited (“MIIF”) is a Bermuda-registered mutual fund Company listed on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Macquarie Infrastructure Management (Asia) Pty Limited (“MIMAL”) is the manager of MIIF. MIMAL is a wholly owned subsidiary of Macquarie Group Limited.

None of the entities noted in this document is an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 “MBL“. MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities.

This circular is not an offer or invitation for subscription or purchase, or a recommendation of securities. It does not take into account the investment objectives, financial situation and particular needs of the investor. Before making an investment in MIIF, the investor or prospective investor should consider whether such an investment is appropriate to their particular investment needs, objectives and financial circumstances and consult an investment adviser if necessary.

MIMAL, as manager of MIIF, is entitled to fees for so acting. Macquarie Group and its related corporations, together with the officers and directors, may hold securities in MIIF from time to time.

In particular, no representation or warranty is given as to the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in the information. Such forecasts, prospects or returns are by their nature subject to significant uncertainties and contingencies. Each recipient of the information should make its own independent assessment of the information and take its own independent professional advice in relation to the information and any action taken on the basis of the information.

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