HNA enters LatAm airport market in $320m deal

The infrastructure division of Chinese business conglomerate HNA Group has entered the Latin American market with the acquisition of a controlling stake in Rio de Janeiro’s largest airport in a deal worth around $320 million.

HNA Infrastructure said in a statement the move is part of a Chinese initiative to foster connections in Latin America. The company purchased a 60 percent stake in Rio de Janeiro Aeroportos (RJA), a holding company with a majority interest in Aeroporto Internacional Antonio Jobim—Galeão (GIG Airport), from Brazilian construction company Odebrecht, which is mired in a corruption scandal from last year.

The deal has HNA paying Odebrecht an equity cheque of 60.1 million reais ($18.8 million; €16.45 million), in addition to 1.01 billion reais in concession fees to GIG Airport. The company said it would sell its current 9 percent stake in RJA to Singapore-based airport operator Changi Airports International for 9 million reais.

HNA will hold a 51 percent stake in RJA, and Changi a 49 percent stake when the deal closes later this year.

“GIG Airport provides unparalleled opportunities for HNA Infrastructure to expand our reach into Latin America and provide added resources to fuel this key airport’s growth and development,” chief investment officer of HNA Infrastructure Guanghui Ma. He added the deal is a reflection of the company’s commitment to China’s “belt and road” initiative and to strengthening ties with Latin America.

At the group level, HNA, which manages $145 billion in assets, owns stakes in 13 airports, mostly in Asia. It’s recently turned an eye toward international expansion, joining a consortium that was selected in January as the preferred bidder for the Frankfurt-Hahn Airport. It also purchased a 13 percent stake in Virgin Australia last year and was an unsuccessful bidder for London City Airport.

Odebrecht has been attempting to sell assets after facing massive penalties over past corruption charges. In January, talks for Brookfield Asset Management to pay Odebrecht $5.2 billion for a gas pipeline in Peru stalled when the deal faced government resistance.

In December, Odebrecht pled guilty to corruption-related charges in US federal court, agreeing to pay $2.6 billion-$4.5 billion in penalties after reaching an agreement with US, Swiss and Brazilian authorities over bribery payments made to Brazilian politicians and the state-controlled oil company Petrobras.

The company sold a different part of its portfolio, a 70 percent stake in a wastewater treatment business, to Brookfield Business Partners in a $908 million deal in April.