The Independent / The Irish Independent
Ferrovial in talks with JPMorgan to sell Belfast’s George Best airport
By Paul Gosling
Wednesday, 2 April 2008
Ferrovial is in negotiations with JPMorgan Asset Management to sell the George Best Belfast City Airport as part of its efforts to reduce its debt burden of more than €30bn (£24bn). Ferrovial is the owner of the embattled British Airports Authority, which operates the Gatwick, Stansted, Edinburgh, Glasgow, Aberdeen and South-ampton airports, as well as Heathrow.
Neither Ferrovial nor JPMorgan would comment on the prospective sale, but a source close to the negotiations confirmed they were taking place.
Ferrovial bought the airport from the Canadian aircraft manufacturers Bombardier in 2003 for £35m. With Belfast City Airport’s rapid expansion in recent years, Ferrovial is likely to seek up to £100m for its sale. Ryanair, Flybe and BMI all operate flights from the airport, which was renamed after George Best two years ago. It flies more than two million passengers a year.
Belfast City Airport refused to confirm the negotiations. A statement from the airport said: “It is understandable that in the current climate and in light of ongoing activities at BAA airports, there will be speculation with regards to Ferrovial’s assets. However, Belfast City Airport is not currently on the market.”
The prospective sale would mark the latest in a string of asset disposals by Ferrovial aimed at reducing its massive debt. Last week, BAA announced it was selling 33 property assets owned in a joint venture with Morley Fund Management to the Arora Family Trust for £265m. BAA said it would seek further non-core property asset disposals in the coming months.
Last month, BAA announ-ced its sale of World Duty Free Europe to the Italian retail and catering group Autogrill for £546m, providing Autogrill with a 12-year concession at BAA airports. At the end of last year, BAA disposed of its interests in six Australian airports, obtaining £340m. In 2006, Ferrovial sold its half share in Sydney airport to the co-owners Macquarie for more than A$1bn (£458m). It has also sold its interests in Bristol and Budapest airports in the past two years.
Ferrovial paid £10.3bn for BAA two years ago, mostly financed from debt. As at December, Ferrovial was carrying debt of more than €30bn, against profits for last year of €734m (£579m) – down 48.5 per cent on the year before.
The company has said that it hopes to refinance £9bn of debt by the middle of this year. Its other remaining interests include the ownership of the Amey construction group.
Rumours have been growing that Ferrovial may be interested in selling Gatwick airport and that the Competition Commission may force the break-up of its monopoly of major London airports.
Last month, the House of Commons Transport Sel-ect Committee backed the ending of the monopoly. Calls for the break-up of BAA have increased after the problems associated with the opening of Heath-row’s Terminal 5.
JPMorgan Asset Management has steadily built up its portfolio of infrastructure assets. It formed an infrastructural investment group two years ago.