June 3, 2019

Court stalls sale of Toulouse stake

A French court in early June ordered the operator of the Toulouse airport to postpone its annual shareholder meeting, the latest twist in a dispute over a Chinese firm’s plan to sell its nearly 50% stake.

Casil Europe, a holding company created by China’s state-owned Shandong Hi-Speed Group and Hong Kong-based Friedmann Pacific Asset Management, is hoping to sell its 49.99% stake to French construction and concessions group Eiffage.

Casil Europe wants to unload the shares after the French government decided in 2018 against selling the company a further 10%, an option Paris had retained after privatising the airport in 2015.

The airport’s other main shareholders, however, a group of local governments and the Toulouse Chamber of Commerce, are fighting the sale to Eiffage.

Those shareholders maintain that the regional hub needs public ownership to ensure profits are re-invested in operations, and not siphoned off by private owners.

The stakeholders have asked the commercial court in Toulouse to put Casil Europe’s stake in an escrow account to prevent any deal with Eiffage.

With postponement of Casil Europe’s annual shareholder meeting, no votes can be taken for crucial decisions on dividends or a stake sale.

Casil Europe must wait for a ruling on the appeal of a Paris administrative court decision to cancel the privatisation, which the government is contesting.

The Toulouse airport chalked up a record 14.6% increase in 2017 traffic to 9.2 million passengers, making it the fifth-largest airport in France.

Increased passenger volume has been driven mainly by the growth of low-cost airlines, such as EasyJet and Ryanair, with international flights now making up half of the airport’s traffic.

Casil Europe had indicated plans to boost throughput at Toulouse to 18 million passengers by 2046, largely by developing connections to Chinese destinations.