December 29, 2018

Vinci buys major Gatwick stake

Vinci Airports, a unit of Europe’s biggest construction and concessions company, has agreed to pay £2.9 billion ($3.7 billion) for a 50.01% stake in London Gatwick, the second-largest airport in the UK.

The deal, announced as a “new partnership” by Global Infrastructure Partners (GIP), is expected to be ratified by the middle of 2019.

Gatwick is owned and managed by GIP and a consortium of its co-investors.

Vinci is buying Gatwick shares from existing shareholders.

GIP will halve its stake in Gatwick to 21%.

With the transaction, Abu Dhabi Investment Authority will own a 7.9% stake, California Public Employees’ Retirement System 6.4%, National Pension Service of Korea 6.0% and Australia’s Future Fund Board of Guardians 8.6%.

In 2009, GIP paid just over £1.5 billion for Gatwick.

In the year ended 31 March, Gatwick Airport Group reported total revenue of £764.2 million, with EBITDA of £411.2 million.

GIP is owner of Edinburgh Airport and owned London City Airport from 2006 to 2016.

With the transaction, Vinci will have a network of 46 airports in 12 countries; Gatwick will become the largest airport in Vinci’s portfolio.

In 2017, Vinci’s’ managed activities revenue reached €3.2 billion ($3.7 billion), with the company posting consolidated revenue of €1.4 billion.

From 2014 to 2017, Vinci’s revenue grew 196%, driving the concessions business up 19.3%.

Vinci Construction’s revenue fell 9.5% over the same period.

The Gatwick deal follows Vinci’s purchase of the Airports Worldwide management portfolio, finalised in August, that allowed the France-based company to enter the US and expand in Europe.

… Vinci closes on Belgrade concession

Vinci closed financing in December on a 25-year concession to operate Serbia’s Nikola Tesla Airport (Belgrade).

To complete the transaction, Vinci raised €20 million in loans maturing over a maximum of 17 years from four multilateral institutions — International Finance Corporation (IFC), a member of the World Bank Group; European Bank for Reconstruction and Development (EBRD); Agence Françise de Développement (via subsidiary Proparco); and DEG (KfW Group) — and from six merchant banks: UniCredit, Intesa, Erste, Société Générale, Kommunalkredit and CIC.

The loans complement the equity that Vinci is investing in the operation and cover the €501 million upfront concession fee paid to the granting authority as well as the airport extension and upgrade works provided in the contract.

Vinci also pledged to invest another €732 million in the airport over the 25-year concession term.

These financing arrangements represent one of the largest financial transactions ever carried out in Serbia.