Ferrovial sells Belfast airport to ABN infrastructure fund

The £132.5m sale comes as the UK’s Competition Commission is threatening to force the Spanish infrastructure investor to sell three airports owned by the British Airport Authority, which it acquired in 2006.

Ferrovial Aeropuertos, the airport investment arm of Spanish construction and infrastructure firm Grupo Ferrovial, has reached an agreement to sell a 100 percent interest in George Best Belfast City Airport to ABN Amro Global Infrastructure Fund for £132.5 million ($234.1 million, €164.2 million).

Ferrovial said the deal was part of its strategy to focus its UK airport business on the British Airports Authority (BAA), which it acquired in 2006 for £10.23 billion as part of a consortium that included Caisse de Dépôt et placement du Québec and Baker Street Investment. BAA owns seven airports in the UK and has a 65 percent stake in Naples Airport in Italy. Belfast City Airport was owned directly by Ferrovial, not BAA.

Based on preliminary calculations, Ferrovial estimated its capital gains from the sale would be approximately £85.6 million. It bought the airport in 2003 from Canada’s Bombardier for approximately £35 million.

The sale follows similar moves by the firm last year. In February 2007, Ferrovial sold its 20.9 percent stake in the company holding the rights to Sydney Airport, followed in June by BAA’s sale of its 75 percent interest in Budapest Airport. In November, Ferrovial sold minority interests in Australian airports.

Pending the close of the transaction, Ferrovial will still own one non-BAA airport: Cerro Moreno Airport in Chile, in which it has a 100 percent interest.

However, Ferrovial may also have to sell some of its BAA airport portfolio after the UK’s Competition Commission announced last month that it may order the company to sell two of its three London airports, as well as either Edinburgh or Glasgow airport. The Competition Commission said it was concerned about BAA’s dominance in the market.

The deal is the first airport asset for the €1.1 billion ABN Amro Global Infrastructure Fund. Hafeez Ahmed, the fund’s chief financial officer, told PEO the fund had looked at airport assets in the past but “this one in particular interested us due to its link to Northern Ireland and the city of Belfast, which we believe offers long term growth opportunities”.

Ahmed expects Belfast City Airport to be fund’s final asset purchase, with the vehicle almost entirely invested. Excluding the airport, it owns eight assets with an approximate total enterprise value of €4 billion. The fund, which focused mainly on asset in OCED countries, such as the UK, has previously invested in solar plants in Spain, school projects in Scotland, energy distribution companies, a waste management company and a toll road tunnel in Sydney. It is ABN Amro’s debut infrastructure fund.

London-based Faros Infrastructure Partners, which provided specialist transport and aviation-related advice to ABN Amro during the transaction, has an option to acquire a minority stake in the airport going forward.

In 2007, Belfast City Airport handled 2.2 million passengers and ranked as the UK’s 18th busiest airport, according to figures form the UK’s Civil Aviation Authority.