Global Airport News

Spain's Ferrovial is in talks with investors to sell 10 percent of UK airport operator BAA, which runs London Heathrow airport, by June, its CEO said, in a move to halve a EUR€24.5 billion (USD$32 billion) debt pile.

Ferrovial will seek offers for the stake, estimated last year to be worth about EUR€200 million, in the last week of January, with the aim of clinching a deal in the first half.

"(Talks) are mainly with infrastructure funds, sovereign wealth funds and big investors like pension funds, mainly from the United States and Britain," chief executive Inigo Meiras said at a press breakfast.

Ferrovial owns 55.9 percent of BAA, the operator of airports including Heathrow and Stansted. By dropping its holding below 50 percent, the Spanish company will no longer need to consolidate BAA debt on its balance sheet.

It sold 10 percent of its lucrative Canadian 407 Express Toll Route to the Canadian Pension Plan Investment Board (CPPIB) for CAD$894 million last year and Meiras said it wants to continue selling mature infrastructure assets in 2011.

BAA WOES

The BAA stake may prove trickier to sell after BAA said this week it expects to take a hit of around GBP£24 million (USD$38 million) to account for the costs of last month's big freeze, which closed many of its runways and dented passenger numbers in the week before Christmas.

"Bad weather is part of systemic risk in the airport business and this has obviously been factored into our valuation of the stake," Meiras said.

Virgin Atlantic has threatened to take legal action against BAA over the closure of Heathrow last month and said it will withhold fees it pays to BAA until a probe into the disruption is completed.

Meiras said no airline had yet withheld fees to BAA because of the last month's closures.

The BAA sale plan dates back to October of last year when the company said it would go ahead some time in 2011.