Chinese investors end controversial Toulouse airport reign with €500m departure

China Airport Synergy Investment Limited has ended a controversial ownership of a 49.99 percent stake in France’s Toulouse Blagnac Airport after nearly five years.

The company, owned by Shandong High Speed and the Hong Kong-based Friedmann Pacific Asset Management, sold the stake to French operator Eiffage, which said in a statement that it had paid “close to €500 million” for the asset.

CASIL completed its bid for the concession, which runs until 2046, in April 2015, paying the French state €308 million. The other owners comprised a collection of French public bodies. The privatisation was led by France’s then economy minister and current president, Emmanuel Macron.

“At the very beginning of the process, when the state sold the asset the choice of the Chinese investor was very controversial,” Jean-Luc Champy, energy and infrastructure partner at law firm Orrick, told Infrastructure Investor. “They proposed the highest price and there was a real difference between the Chinese bid and the other one, so the state had no choice.

“Eiffage coming in is probably good news for the government and for the local authorities too, as they have a good relationship with the group. They will probably be more cautious with the profit issues than the Chinese.”

In early 2019 a French court ordered that the deal be cancelled, in part because of improper documentation that named and then removed Canadian contractor SNC Lavalin as leader of the consortium between the original offer and completion. However, France’s Supreme Court overturned the lower court’s order in October.

The Chinese consortium’s brief ownership drew criticism from several public officials. Among these was Marc Péré, mayor of the suburb of L’Union in the Toulouse metropolitan area, who accused the investors of paying out all profits as dividends and criticised the €190 million capital gains he said they had made on the sale.

He added in a statement that the consortium’s ownership had been “a state scandal. A shame. An organised, encouraged hold-up supported by French public authorities.”

The sale came as the government plans to privatise Aéroports de Paris, owner and operator of the three airports in the French capital, in addition to several other domestic and foreign airports. A petition to institute a referendum in order to prevent the privatisation has reportedly garnered 1 million signatures, though around 4 million will be needed for the plebiscite to take place.

“The government can organise the privatisation now if they want,” said Champy. “The law to proceed is now in force. For there to be no more issues related to Toulouse airport, that is probably good for the privatisation.”