USA Airport News
Chicago said on Tuesday it is negotiating to give a consortium up to six months longer to find financing for its $2.52 billion lease deal for Midway Airport, citing the recession's impact on financing.
If the 99-year lease deal with the Midway Investment and Development Corp consortium falls through, the city said it gets to keep a $126 million letter of credit. It could then resubmit the lease offer when the economy improves.
The consortium is made up of Citigroup unit Citi Infrastructure Investors, YVR Airport Services Ltd and John Hancock Life Insurance Co.
The consortium won a bidding process over five other groups and the deal was supposed to close in January. The closing date was then extended to April 6.
"The global economic recession is obviously having a substantial impact on the availability of financing," city spokeswoman Jodi Kawada said.
"We may allow extra time to ensure we're doing everything we can to close the transaction, if possible," she said.
Chicago had planned to use some of the proceeds to retire $1.3 billion of outstanding Midway debt, while 90 percent of the $1 billion Chicago was to net from the deal was to be spent on infrastructure improvements and city pension funds. The remaining $100 million was unemcumbered funds.
The airport deal was among several multibillion-dollar privatization deals arranged by Chicago, including leases of its Chicago Skyway toll bridge, downtown parking garages, and parking meters.
