UTS Library

Building Shareholder Value


Prime Infrastructure Management

PR Company: 

Phillips Group (Stephanie Paul)

Award Category: 

Award Type: 

Call Number: 

2003 E 2



Executive Summary: 

Prime Infrastructure is a Queensland-based infrastructure fund, listed on the ASX in 2002.
It was created for listing and to identify, acquire and manage quality infrastructure assets. Its portfolio at listing included Dalrymple Bay Coal Terminal (DBCT), and was subsequently expanded to include Ecogen assets (Jeeralang and Newport Power Stations) and the Redbank Power Station.

Primes listing was <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Queenslands largest, and Australias most significant float, for the year. Prime was also unique because it was enabled Australians to invest in a port-based coal terminal.


Prime floated as a stapled security (security holders paid $0.70 at listing and $0.30 final payment at the call one year later). After Prime s fully subscribed listing, it needed to achieve confidence in its future performance, market support and full take-up of the final payment at call.


Post September 11 2001, Prime was one of the few companies to list in such a highly volatile market. In addition it had a complex corporate structure which the market struggled to understand.

Issues and challenges

To achieve full payment of the call, Prime needed to overcome significant issues and challenges:

  • Competitive pressure from larger, more established investment funds
  • Lack of market understanding of Prime limited its appeal to investors
  • Market pressures from falling global equity markets
  • Pressure to comply with demanding regulatory requirements
  • Operational Issues  from the acquisition of additional assets
  • Environmental and community issues in managing the expansion of DBCT
  • Managing market issues arising from retaliatory actions by competitors.

Prime successfully implemented an Australian-wide investor relations communication program to support its operational achievements, which resulted in an increased share price, institutional interest and near 100% take-up of its call.

Situation Analysis: 

Prime Infrastructure (Prime) is an ASX listed infrastructure investment vehicle established to identify, acquire, manage and enhance high quality infrastructure assets. When it floated in mid 2002, its sole asset was the Dalrymple Bay Coal Terminal (DBCT).

Amid highly volatile market conditions, Prime with a market capitalisation of $400 million, was <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Queenslands largest, and one of Australias most substantial floats for that year.

In December 2002 Prime acquired its second asset which was a 50% interest in the Ecogen electricity assets (Newport and Jeeralang in Victoria). In June 2003, it added to its portfolio, acquiring a 50% stake of Redbank power station (HunterValley).

Prime is a stapled entity comprising Prime Infrastructure Management Limited and Prime Infrastructure Trust. The initial float involved a $1.00 stapled security partly paid to $0.70. The final payment of $0.30 was due on 1 July 2003. Some 71% of the group was floated, with the balance retained by Babcock and Brown (B&B). Retail investors, attracted by the 10% plus yield, held the majority of securities.

Despite its attractive yield, the stocks complex corporate structure and low profile restricted its appeal to many retail investors. A majority of institutional investors also showed limited interest. Prime's complex structure was considered too difficult to model by many analysts
to value.

In the year leading up to its call, it was crucial for Prime to achieve several significant milestones within an intensive period of operational activity:

  • On 30 June 2004 DBCT becomes regulated by the Queensland Competition Authority, which triggers a pricing review, requiring Prime to deliver an Access Undertaking to the Queensland Government.
  • DBCTs regulation also required a renegotiation of pricing agreements with customers. This needed to occur after Prime had paid out its existing original user rebates with customers of the terminal.
  • Purchased under leasehold agreement from the Queensland Government, Prime was also required to submit a Master Plan for the terminals expansion. This required extensive consultation with communities surrounding DBCT.
  • Prime needed to deliver on its prospectus promises of acquiring high quality infrastructure assets, and did so through the purchase of Ecogen and Redbank Power Stations.
  • At listing, Prime had one staff member. In the lead up to the call Prime appointed a cohesive, outcome oriented senior management team that would confirm the delivery of a sustainable business model.
  • Stages 5 and 6 of DBCT needed to be successfully completed to demonstrate Primes ability to not only identify and acquire assets, but also enhance them to increase revenue streams.

To support this period of intense activity, Prime needed to develop and implement an Australian-wide investor relations communication program that would ensure the market understood the significance of these milestones, raised the companys profile and protected its reputation to ensure a fully valued share price and take-up of the call.

Investor Relations Challenges

In maintaining its capitalisation strength in the lead up to the 2003 final payment, Prime needed to develop an investor relations strategy that would address a number of challenges: 

Competitive pressure

  • Competition for infrastructure assets, particularly from much larger funds.

General market perceptions

  • Complex corporate structure, and limited knowledge and understanding of Prime's operations limiting investor, analyst and broker appeal.
  • Limited institutional interest due to earlier lack of inclusion in the major indices.
  • Overriding the market perception that Prime was purely a retail stock by gaining institutional interest via inclusion in the ASX 200 index.

Market pressures 

  • Following September 11 2001, global equity markets were in downward spirals and investors were defensive and conservative.
  • Potential selling pressure in the market in the lead up to the final payment.
  • Market scrutiny of Prime's ability to complete DBCT Stage 6 on time and on budget the first real test of management competence.
  • The Ecogen and Redbank assets were purchased with consortium partners under complicated hedge agreements that were not well understood by Prime shareholders, analysts and institutional investors.

Regulatory environment

  • Potential fallout from rejection of Access Undertaking by the QCA.

Operational issues

  • Quantum growth. The Ecogen and Redbank acquisitions.

Environmental issues

  • Local complaints about coal dust surrounding DBCT.
  • Environmental Management Plan development.

Media relations

  • Media sought information about the listing for five months before it took place, yet under regulatory requirements, none of these listing rumours could be confirmed until the prospectus had been registered.
  • Competitor misinformation market actions.

Community relations

  • DBCT Master Plan development and consultation with surrounding community.


To develop strategies, primary and secondary research was undertaken to determine issues and perceptions:

Primary research:

  • Interviews and meetings with Prime management team (to determine expectations, vision, goals, objectives and timeframes).
  • Competitor activities monitoring
  • Industry issues tracking and infrastructure management fund stockmarket performance
  • Monitoring perceptions of Prime through community consultation and public displays
  • Financial market research to monitor perceptions of Prime
  • Media monitoring analysis

Secondary research:

Review of:

  • DBCT Crisis/Issues Management Plan 2002
  • DBCT terminal information brochures prepared by the Queensland Government
  • (Mackay and surrounds) Community Reference Group (CRG) newsletters
  • Corporate and Business Study Prime Infrastructure 2002
  • Prime Infrastructure Corporate Report Outlook for Growth 2002
  • Broker and analyst summaries of Prime Infrastructures strengths and weaknesses
  • Prime Operations Board Reports
  • DBCT Master Plan
  • <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />New South Wales State Government- Working with Government, Guidelines for Privately Financed Projects 2001
  • Queensland Government Information Memorandum, Long-term Lease of DBCT
  • Ports Corporation of Queensland Economic Impact Study 2001/02
  • OECD Work Energy Outlook Report 2002
  • Queensland Business Magazine Public Private Partnerships article
  • QueenslandState Infrastructure Plan
  • International Energy Agency World Installed Electricity Generation Capacity, World Energy Demand and the Increase in World Primary Energy Production reports
  • Australian Infrastructure Report Card 2001
  • JP Morgan broker reports
  • Wilson HTM broker Reports
  • GladstonePort Authority Annual Report 2201/02
  • Primes competitor websites

Target Policies: 

Target publics were identified as primary and secondary and prioritised in their importance in determining Primes message to its target markets.

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Communication Strategy: 

Communication Strategy and Implementation <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />


The strategy concentrated on building awareness, educating the markets, and managing Primes reputation as it delivered on its prospectus promises and operational achievements. Specifically it involved:

  • Educating and informing investors on assets and potential capital growth to build confidence in the stock.
  • Ensuring analysts understanding the tax implications and cash flow and income projections, to facilitate their interest in the stock. 
  • Being open and transparent to reassure institutions of Prime's independence, management performance and ability to deliver on forecast revenues.
  • Building and securing confidence in the stock ahead of the July 1 payment to ensure ongoing market support.
  • Reassuring the market of Prime's ability to deliver commercial outcomes from the access and pricing negotiations.
  • Developing strong and cooperative relationships with asset host communities to manage its reputation.
  • Demonstrating a commitment to effective and responsible environmental practices.


  • The activities implemented were designed to build shareholder value by raising the company's profile and strengthening the company's corporate reputation.
  • Awareness

  • Shareholder communication including correspondence, interim report to build understanding.
  • Raising Prime's profile nationally
  • Building financial and investment media understanding of Prime's objectives and operations through briefings.
  • Building the CEOs profile


  • Educating investment community through roadshows.
  • Attracting new investors by raising Prime's profile with media.
  • .Targeting new investors with a roadshow presentation to the top 15 retail brokers. 
  • Capitalising on local knowledge and support with presentations to regional retail brokers.
  • Broadening the target investor base through presentations to financial planners with direct equities capabilities.
  • Building the interest and confidence of institutions through an expanded program of presentations to institutions, in conjunction with the sponsoring brokers.
  • Consolidating institutional support with quarterly summary reports setting out progress against stated aims. 
  • Building analyst awareness and understanding of Prime's structure and operations with the provision of regular detailed, clear and transparent information.
  • Building analysts interest in Prime through an expanded program of analysts briefings, supported by tours of the DBCT and Ecogen facilities.


  • Establishing strong and co-operative relationships.
  • Highlighting Prime's compliance with statutory and environmental requirements in all corporate documents.
  • Establishing a separate identity for Prime to protect its reputation.
  • Building market awareness of the management teams ability to deliver against forecasts.
  • Identifying and mapping potential risks and key stakeholders.
  • Developing a corporate position and approach
  • Developing a risk and issues management plan.
  • Building strong and co-operative relationships with host communities through sponsorships.
  • Establishing a community reference group as part of the ongoing Master Planning process.
  • Building community support for DBCT facility with a community open day in conjunction with the Stage 6 launch.



Objective 1: Achieved

Final instalment call on 1 July 2003 was an outstanding success with all but five of the 9500 security holders paying their final 30 cents. Market reports encouraged investors to buy Primes stock, which led to Primes inclusion in the ASX 200, triggering institutional support. Primes share price also outperformed the All Ordinaries.

Objective 2: Achieved

There was no occasion where Primes reputation was jeopardised, despite numerous issues throughout the year. Prime achieved community endorsement of its DBCT Master Plan. Positive media coverage is also testament to the effectiveness of Primes issues management and strong media relationships. (See Appendix A1 Primes Price History Chart. See Appendix A2 Sample Media Coverage.)


The program yielded very positive results for Prime, reaching all intended stakeholder groups. Its success was evaluated against the following:

  • Content analysis of media coverage generated
  • Community feedback and evaluation forms to monitor how issues were managed around the significant asset, DBCT
  • Broker and analyst reports recommending Prime
  • Share price growth and tracking against the All Ordinaries