Greece plans sale of Athens airport stake

The Greek finance ministry has announced its intention to float its 55% stake in the concessionaire that runs Athens International Airport in a deal that could be worth over €1bn. Hotchief and the Australian Infrastructure Fund own the remainder of the concessionaire.

Debt-laden Greece is considering floating its 55 percent stake in the company that runs Athens International Airport, the country’s finance ministry announced yesterday.

Athens airport: could net
government over €1bn

Athens International Airport became the world’s first privately financed airport project in June 1996 when the Greek authorities signed a build-own-operate-transfer (BOOT) contract with a consortium led by German infrastructure group Hochtief.

Under the 30-year agreement, the Greek state owned a 55 percent stake in the special purpose vehicle created to hold the concession while Hochtief held a 40 percent stake. The remaining five percent are in the hands of the Australian Infrastructure Fund (AIF).

To help counter its burgeoning debts – and as part of a wider privatisation programme – the government is now exploring the sale of its stake via a listing on the Athens stock exchange. But to maximise the value of a potential listing, the government is also considering extending the concession contract for the airport, which currently expires in 2026. A senior Greek banker explained the strategy:

“If the government were to sell its stake without extending the life of the concession it could – if market conditions were favourable – net about €1 billion. But with only 16 years outstanding, it would probably not be that interesting to investors. And besides, an extension would also increase the stake’s valuation,” the banker said.

An extension of the 30-year concession period would also increase the value of the stakes currently held by Hochtief and AIF, potentially boosting the net asset value of their respective portfolios. However, the Greek government’s plans are still in their early days, the banker pointed out, with advisors still to be hired to help run the sale.

Athens Airport is “a good asset”, the banker said, highlighting that it has generally outperformed other European airports since the financial crisis hit passenger numbers across the world. It recorded €511 million in revenues in 2009 with earnings before interest, tax, depreciation and amortization (EBITDA) coming in at €369.5 million. A total of 16.2 million passengers travelled through the airport in 2009, a slight decrease from the 16.5 million recorded in 2007 and 2008.