On the day before the Competition Commission reported on the probable break-up of BAA, the airport company completed its re-financing deal
BAA has finalised the much-delayed £13.3bn refinancing of its UK airports more than two years after the highly leveraged takeover of the group by a consortium led by Spain's Ferrovial. With the Competition Commission about to publish its recommendations regarding the breakup of the UK's largest airport group who operate Heathrow, Gatwick, Stansted and Southampton airports in England, and Scotland's main airports, Glasgow, Edinburgh and Aberdeen.
Under the financial package BAA has perhaps predicted the Commission's findings by re-organising the airports into two distinct financial entities, the London airports, and separately Southampton plus Scotland. Word coming out of BAA at the highest levels is that the airport group has come to the inevitability that at least one of its airports will have to be sold off.
In a financial statement BAA says that it has committed £3bn to fund immediate investment projects across the seven UK airports. What it does not say is how much is committed if its size is reduced to less than the seven airports and where the funds realised by the sale might go. BAA is committed to support the Crossrail project, at Heathrow, both the east terminal and a new runway, whilst at Stansted a second runway is planned. Major investment is required at Gatwick with the re-building of the railway station a priority.
Sir Nigel Rudd, BAA chairman, said at the weekend there had already been "huge expressions of interest" from potential buyers of both Gatwick and Stansted, though he pointed out that neither were currently for sale.
Manchester Airports Group, owner of Britain's fourth-busiest airport, with 21 million passengers last year, said it might seek to bid for Gatwick with a private equity partner. The company is Britain's second-biggest airport operator and also owns East Midlands and Bournemouth terminals. It is presently in negotiations to sell Humberside, its smallest operation.
Malcolm Ginsberg