Auckland Airport to sell North Queensland Airports stake for $A370 million
The proceeds will help fund a $1.8 billion infrastructure spend in Auckland.
The proceeds will help fund a $1.8 billion infrastructure spend in Auckland.
Auckland International Airport will sell its quarter-stake in the Cairns and Mackay airports in North Queensland to its fellow investors for A$370 million, almost three times what it paid eight years ago.
The Auckland Airport operator this month said it was considering sell the holding and today said it will offer its 25 percent stake in North Queensland Airports to the Australian transport hub's existing investors. All NQA investors are entitled to maintain their current holdings and Perron Investments and The Infrastructure Fund have already agreed to accept the entire offer.
"We are very pleased to have reached a position that will result in a sale of our entire interest and that two existing and experienced infrastructure investors have agreed to support NQA in the next stage of its development," chief executive Adrian Littlewood said in a statement. "The sale will enable Auckland Airport to focus attention on growing its New Zealand travel, trade and tourism businesses and to recycle the proceeds into supporting the significant step up in aeronautical investment at Auckland Airport over the five years that we recently announced."
The Kiwi company bought the stake in Australian airports in 2010 for A$132.8 million in an effort to expand outside its core Auckland business to develop connections with Cairns and build routes into Asia.
North Queensland Airports reported a net profit of A$46.8 million on revenue of A$142.7 million in the June 2017 financial year, turning around a loss of A$54.8 million on revenue of $134.6 million in 2016. Mackay airport's domestic passenger numbers shrank 8.4 percent to about 775,000 in 2017, while Cairns' domestic traffic rose 3.5 percent to 4.4 million and international traffic excluding transits was up 7.4 percent to 668,000.
The asset sale comes as Auckland Airport prepares for a $1.8 billion infrastructure spend, introducing new contact gates for international aircraft, a new domestic jet terminal, expanded border processing and public arrivals spaces and upgraded international check-in areas.
The proposed price hikes to pay for the capital spend will come under the scrutiny of the Commerce Commission in its semi-regular investigation of how airports set their prices under an information disclosure regime to discourage airport monopolies from price gouging. A draft report is expected in March.
Auckland Airport shares traded at $6.26 and have dropped 7.3 percent over the past year.
(BusinessDesk)