Ferrovial confirms delay of Chilean roads sale

The Spanish infrastructure group said in its first-quarter results that the sale of subsidiary Cintra’s Chilean road concessions could be delayed by several months from its May 31 closing date following damage caused by the recent earthquake.

Spanish infrastructure group Ferrovial has said in its results presentation for the first quarter of 2010 that the conclusion of the sale of a stake in subsidiary Cintra’s Chilean road concessions might take longer than expected.

Cintra had reached an agreement with Colombian power group ISA to sell a 60 percent stake in its Chilean road concessions for €209 million. But when Chile was struck by its biggest earthquake in 50 years in late February, the conclusion of the sale was put on hold as both companies assessed the damages caused to the concessions.

Preliminary estimates place the cost of repairing the concessions at around $130 million, fully covered by insurance, Ferrovial said. But actually closing the deal “could be delayed by several months” from the planned May 31 deadline.

Ferrovial said it managed to get its Chilean motorway network up and running 48 hours after the quake struck. It also says that nearly all the tolls are already operational with the focus now “on designing more appropriate engineering solutions”.

Cintra Chile is the country’s largest toll road operator, managing over 907 kilometres of roads. In the first nine months of 2009, Cintra’s Chilean business generated €147 million in revenues and €102 million in earnings before interest, tax, depreciation and amortisation (EBITDA).

The sale, which is part of Ferrovial’s strategy of selling mature assets in order to raise money for new projects, is expected to net the company some €250 million after tax.  In 2009, Cintra sold its car parks division to Portuguese company Emparque for €451 million while Ferrovial sold London’s Gatwick airport to Global Infrastructure Partners for €1.6 billion.