French government clears one hurdle to ADP privatisation

Yet other hurdles remain, including a possible referendum on the proposed sale that is pending approval by the Constitutional Council.

France’s National Assembly has approved legislation, the Loi Pacte, that clears the way for the government to privatise three companies, including airports operator ADP Group.

But the potential sale of the state’s 50.6 percent stake in the company, which owns and operates Paris’s three major airports – Charles de Gaulle, Orly and Le Bourget – has been met with opposition, including an initiative to hold a referendum on the government’s plans.

Last week, the opposition Socialist Party said it had enough support, gathering 197 signatures from both left- and right-wing members of the lower house, to hold a referendum. However, France’s Constitutional Council will have to decide whether such a vote would be constitutional. If it rules in favour, then 10 percent of the French electorate – around 4.5 million people – would have to vote against the sale to block ADP’s privatisation.

One lawyer, who spoke to Infrastructure Investor on condition of anonymity, said the proposed sale of ADP would not be “a true privatisation”.

“Today, ADP owns the airports,” the lawyer explained. “But when the Loi Pacte comes into force, ADP will no longer own the airports. The assets will be transferred to the state and a 70-year concession to operate them will be granted to ADP. The privatisation then will be of the concessionaire.”

Paris-based fund manager Ardian confirmed to Infrastructure Investor that it was interested in investing in ADP, but in partnership with the regional authorities, known as the Collectivité Ile-de-France.

Ardian’s head of infrastructure Mathias Burghardt said it only wished to acquire a 29.9 percent stake in ADP. This is the threshold that would allow a sale to proceed without triggering an auction process.

“We have a common methodology with the Collectivité Ile-de-France in that we want to share the governance,” Burghardt said. “We don’t want to be dominant. We have to be an important voice, but not the only voice.”

Ardian owns stakes in Italian airports through an investment it made in 2015 in 2i Aeroporti. The holding company of F2i First Fund owns 35.7 percent of Milan’s Malpensa and Linate airports, 70 percent of Naples airport and 54.5 percent of Turin airport.

Last April, Ardian sold its 49 percent stake in London’s Luton airport to AMP Capital in a deal that was believed to value the site at close to £1bn ($1.3 billion; €1.2 billion).

The other two enterprises that the French government would be able to privatise under the Loi Pacte are state lottery Française des Jeux and utility company Engie.