Spanish government to part-privatize national airport authority

Operation to bring private capital into Aena is the most significant of its kind in 15 years

Terminal 1 at Barcelona-El Prat airport.
Terminal 1 at Barcelona-El Prat airport.gianlucca Battista

The Spanish government on Friday announced the launch of an operation to part-privatize the country’s state airport authority, Aena. The sale of a 49% stake in the body that runs the country’s airports will be the most significant privatization in the last 15 years in Spain, after the government’s attempt to float the state lottery ended in failure in 2011.

The state will retain control of the group once it is listed on the market, which is expected to take place in November, Public Works Minister Ana Pastor explained, speaking after the weekly Cabinet meeting. The operation is likely to inject around €2.45 billion into state coffers.

Pastor went on to say that the entry of investors into Aena would take place in two stages. The first, in which the Public Works Ministry will look for what Pastor described as a “stable nucleus” of shareholders, will involve the sale of 21 percent of the airport operator. The government has been considering making these leading investors sign a three-year permanence commitment, though the minister made no mention of such a plan on Friday. Pastor did, however, confirm that investors would be chosen via a tender, which the ministry hopes will be completed in September.

The government will retain control of the group once it is listed on the stock market

The second phase will involve a public offering of 28% of Aena’s capital that will be open to minority investors. The prospectus for the operation will be published in October, Pastor said, and if all goes according to plan, the new part-public, part-private Aena will be listed on the stock market in November.

The plan to part-privatize Aena has been on the table since 2010 when the previous Socialist administration of Prime Minister José Luis Rodríguez Zapatero approved the flotation of the state lottery company and gave the go-ahead for SEPI, the public company that looks after the state’s industrial shareholdings, to sell a number of its stakes in private firms with the aim of reducing the public deficit.

However, the virulence of the crisis forced the government to cancel these operations, which meant it missed out on receiving an estimated €13 billion.

The operation is expected to inject around €2.45 billion into state coffers

Now with markets recovering, and confident that the worst of the crisis is now behind it, the conservative Popular Party government believes the moment has come to launch the operation. It is also now able to attract potential buyers with the boast that AENA – which is also responsible for air traffic control in Spain – stopped making losses in 2013, registering earnings of €715 million after cutting expenditure and reducing its debt.

As for the value of the company, AENA president José Manuel Vargas said in a recent interview with EL PAÍS that airports in neighboring or similar countries are usually valued at 10 times their Ebitda (earnings before interest, taxes, depreciation, and amortization). “I think we can easily talk of around €16 billion, bearing in mind that Ebitda surpassed €1.6 billion last year,” he said. “From this you have to subtract the debt of the company, which is still very significant at over €11 billion.” Under these conditions the government would thus be able to take in around €2.45 billion.

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