A deal to purchase the hub is close to being finalized but the signing may slip into next year because the buyers need to agree on the price with the three current owners as well as 10 debt holders simultaneously, Economic Development Minister Marton Nagy said in an interview in Budapest on Monday.
“It’s a very complex negotiation,” the minister said. The government is seeking to agree on a “competitive, market-based price.”
Hungary is teaming up with French infrastructure group Vinci SA in the first step of the deal, with a Hungarian state-owned vehicle looking to buy a 51% stake, Bloomberg reported last month. The Qatari fund may then join either as a financial or strategic investor, Nagy said.
When the acquisition goes through, Hungary plans to expand the airport by building a third terminal and boosting capacity for both passengers and cargo, the Nagy said.
Vinci and Hungarian state-controlled Corvinus International Investment Zrt. requested European Union approval last month for the purchase. The government has long coveted the airport but was forced to abandon an earlier takeover attempt amid a cash squeeze.
“Hungary seeks to leverage synergies with its co-investor — which is both an airport operator and a developer — to build the third terminal,” Nagy said.
Prime Minister Viktor Orban previously floated a potential Qatari involvement in an interview in May at the Qatar Economic Forum. Qatar’s investment authority also owns a stake in Heathrow Airport in the UK, and the hub recently attracted the Saudi Arabian PIF investment fund as a new shareholder.
AviAlliance GmbH, the operator of the Hungarian hub and its biggest shareholder, initially had no plans to sell the airport. It entered into talks after a years-long government campaign that sought to push out the current owners for under-investing in the hub, a claim the management has denied.
This time, Hungary has built up a war chest for the purchase, including the divestiture of a 15% stake in the local unit of Erste Group Bank AG, the sale of a 35% stake in the Hungarian unit of Vienna Insurance Group and by issuing debt.
“The strategy is to focus on logistics and to build a third terminal at Budapest Airport,” Nagy said.
Source from: Bloomberg