BAA Could Sell Gatwick
15th May 2008
Experts believe that BAA might be forced to bring forward their planned sale of Gatwick Airport if the company is unable to complete the £10 billion refinancing of its debts.
BAA, which operates Stansted, Heathrow and Gatwick Airports, has recently said that its investors have already agreed to pay them an extra £400 million in funding. It is thought that this extra cash will enhance the company's poor credit rating, which was reduced to one notch above junk last month. If the company's credit rating is restored, they have more chance of gaining the money they need to complete their refinancing.
BAA are struggling to complete their planned refinancing due to their poor credit rating and the impact of the global credit crunch. Their refinancing difficulties means that BAA’s planned sale of Gatwick, which could raise £2 billion or more for them, could be speeded up. A number of companies have already expressed an interest in purchasing Gatwick, including the Manchester Airport Group, so it appears that BAA could expect a rapid sale.
BAA have continued to negotiate with their bank and also intend to begin consultations with BAA bondholders, who currently hold about £4.7 billion of BAA debt. However, the company has warned that difficulties in the current credit market could hinder these talks. A spokesperson said: “BAA may not ultimately be in such a position [to begin negotiations] owing to continuing challenging market conditions.”
Despite rumours that the sale of Gatwick is imminent, a BAA spokesperson was keen to state that they had enough money to service their debt and planned to stick to their original timetable, which will see refinancing completed by the end of the third quarter.
Ferrovial, which is a Spanish company, currently hold a 62 per cent majority share in BAA, while the other shares are split between Caisse de Dépôt et Placement de Québec and GIC, which is a Singapore sovereign wealth fund.
Source:
The Times