Go to the Globe and Mail homepage

Jump to main navigationJump to main content

People leave Lisbon’s airport by a door decorated with the logo of airport management company ANA Dec. 27 2012. Portugal’s government decided to sell the company that runs eight airports in Portugal as part of the effort to deal with the country’s financial crisis. (Armando Franca/AP)
People leave Lisbon’s airport by a door decorated with the logo of airport management company ANA Dec. 27 2012. Portugal’s government decided to sell the company that runs eight airports in Portugal as part of the effort to deal with the country’s financial crisis. (Armando Franca/AP)

Portugal to sell Lisbon airport operator to Vinci for $4-billion Add to ...

French group Vinci SA won a privatization tender for Portugal’s airports operator Aeroportos de Portugal SA (ANA) on Thursday with a hefty €3.08-billion ($4.06-billion) bid, enabling debt-laden Lisbon to beat its EU/IMF asset sale goal.

“This shows our capacity to attract foreign investment and raise significant sums above market expectations despite difficult circumstances,” Treasury Secretary Maria Luis Albuquerque told a briefing. “Luckily, the highest bidder also offered us the best strategic project.”

More Related to this Story

Vinci, the largest construction company in Europe by revenue, snapped up a 95-per-cent stake in ANA, outbidding three international consortia. They were led by Germany’s Fraport, Switzerland’s Flughafen Zurich and Argentina’s Corporacion America, and involved funds and companies from Australia, Brazil, Britain, Mexico and Portugal.

Despite Portugal’s steep recession and debt crisis, ANA has been churning profits out of its network of airports in Portugal, including those serving the largest cities of Lisbon and Porto, as well as the Algarve and Alentejo regions and the Madeira and Azores archipelagos.

Vinci operates nine regional airports in France and is the concession company for Cambodia’s three international airports.

It said in a statement that with the acquisition, its airports division will have revenues of more than €600-million serving some 40 million passengers, up sharply from last year’s €150-million with 8.5 million passengers.

In Portugal, Vinci is already one of two main shareholders in Lusoponte which operates Lisbon’s two bridges over the Tagus, including the Vasco da Gama – the longest bridge in Europe.

Lisbon needs to get the most it can from state-owned asset sales after it agreed to raise €5.5-billion by the end of 2013 as part of a €78-billion bailout agreement with the troika of EU/IMF lenders, which also included across-the-board tax hikes and spending cuts.

The government has been betting on infrastructure deals to cut its debt as demand for regulated assets in Europe remains strong despite the region’s debt crisis.

It had earlier raised about €3.4-billion by selling major stakes in power firms EDP and REN mainly to Chinese investors, so now it beat the target by nearly €1-billion. That is despite having shelved the sell-off of flag carrier TAP this month after the sole bidder failed to present the necessary financial guarantees.

“It’s a world record for such transactions involving airports,” Ms. Albuquerque said of the ANA deal.

Portugal’s progress in its economic adjustment, especially in privatizations, has won praise from Brussels and Berlin and contrasts sharply with Greece’s performance after Athens slashed its privatization revenue target in late October.

Next year, Portugal is to privatize the profitable national postal service CTT, the cargo unit of the national railway company Comboios de Portugal, parts of water utility Aguas de Portugal, the insurance arm of state-controlled bank Caixa Geral de Depositos and state broadcaster RTP.

Although privatization revenues only count to reduce state debt but not the budget deficit, the government has a concession agreement with ANA that it argues qualifies some €800-million for deficit reduction purposes this year.

The additional anti-deficit revenue, which is yet to be approved by Eurostat, is needed after tax collection fell short due to the worst recession since the 1970s. Portugal has to meet a budget gap target of 5 per cent of GDP this year and 4.5 per cent in 2013.

Vinci is eager to build its fledgling airport concessions business, especially after losing a bidding contest for Turkish airports operator TAV earlier this year and an upsetting decision by Germany’s Hochtief to suspend a planned sale of its airports.

More than three-fifths of ANA’s revenue comes from domestic and European flights and investors see a potential for growth in long-haul flights to South America and Africa. Profits could also be boosted by running ANA more efficiently and developing non-aviation revenue such as from duty free sales and parking.

In the know

Most popular videos »

Highlights

More from The Globe and Mail

Most popular