Ferrovial cashes in on its Belfast asset as George Best is sold

8.9.2008   (Times)


Ferrovial cashes in on its Belfast asset as Dutch fund pays £132.5m for George
Best Airport

Ferrovial has sold Belfast City airport for four times the purchase price in
a move that bodes well for the Spanish infrastructure company’s likely sale of
Gatwick and Stansted next year.

Ferrovial sold the George Best Belfast City Airport for £132.5 million at the
weekend. It paid £43million for it five years ago.

The Spanish company, which bought BAA, the airports operator, two years ago,
is expected to be forced to sell some of its other assets next year after a review
by the Competition Commission.

In a draft report published last month, the Commission said that BAA’s monopoly
control of airports around London and in Scotland had led to poor service for
passengers and airlines.

It recommended the sale of Gatwick, Stansted and either Edinburgh or Glasgow.
Its final report is due by March.

Belfast’s rapid increase in price suggests that infrastructure assets remain
attractive despite the credit crunch and that the sale of BAA’s airports could
raise more than some analysts expect.

Belfast, which was owned directly by Ferrovial and not via BAA, was bought by
the ABN Amro Global Infrastructure Fund.

Brian Ambrose, chief executive of the Belfast airport, said: "The sale is the
result of Ferrovial’s strategy to focus its UK airport business within the BAA
group, manager of various UK airports. The capital gain on sale, in accordance
with preliminary calculations, is £85 million."

The sale is expected to be completed by the end of the month.

A number of infrastructure funds are rumoured to be lining up bids for BAA’s
airports, should the Commission demand their sale. Sir Richard Branson’s Virgin
Group is interested in leading a consortium of buyers for Gatwick, and Manchester
Airports Group also wants to bid for one of the London airports.

Aviation analysts have valued Gatwick at up to £2 billion, Stansted at £1 billion
and Glasgow and Edinburgh at about £500 million each.

The profitable sale of Belfast may raise Ferrovial’s hopes of generating extra
revenue from the BAA sales. This would help to reduce its enormous debt burden,
which Ferrovial said last week was €28.7 billion ( £23.1 billion).

The debt associated with BAA was €16.2 billion. The Spanish company has been
selling non-core assets, including Budapest airport and a stake in Sydney’s airport,
in an attempt to reduce its debt. Ferrovial has also sold World Duty Free and
the Airport Property Partnership, a portfolio of airport office buildings and

Mr Ambrose said: "The sale does not affect the day-to-day business of the Belfast
airport and we look forward to continuing to serve both our business partners
and our customers. We also look forward to continued investment in the airport

About 2.2 million passengers used Belfast City last year and the airport is projected
to grow to 2.7 million this year. Ferrovial bought the airport from Bombardier,
the Canadian engineering company, in 2003.