BAA in £1bn regional airports fundraising
24.02.08
BAA is reported to be trying to ease its cash problems by raising a £1 billion loan against its regional airports. According to the Times, BAA has appointed Macquarie, the Australian bank, to advise on a £1 billion fundraising involving BAA’s airports outside London - Southampton, Glasgow, Edinburgh and Aberdeen.
BAA was taken off the stock market last year by Ferrovial, the Spanish infra-structure group. It led a consortium of investors that paid £10.3 billion for the group, which also owns Heathrow, Gatwick and Stansted airports. The consortium planned to refinance the £8 billion in loans raised for the purchase last year, but was caught out by a regulatory review of airport pricing and the credit crunch. Some analysts believe hefty interest bills and big investment plans mean BAA could run out of cash halfway through next year.
Ferrovial had planned a refinancing using a securitised bond issue backed by the revenues from the three London bases, with a separate loan for the four regional airports. However, the credit crunch and the threat of lower than expected price rises at BAA's regulated London airports has halted the bond issue. However, the newspaper reports that BAA is now pushing ahead with the regional deal.
Details of the loan talks were revealed by Project Finance International, the influential financial magazine. It said the money raised would be used to ease the company’s finances, and to help raise the market rating of its senior debt to investment grade.
The CAA will release its final determination on BAA’s prices for the next 5 years early next month. Analysts then expect BAA to attempt the main refinancing, and do not rule out a sale of one or more of its UK airports to raise cash, although BAA has said previously that it does not plan to do this.
The company declined to comment on this story. (See also this BAA refinancing story).
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