Copenhagen Airports has agreed to sell its 49% stake in NIAL Group, the parent company of Newcastle International Airport, to the Australian fund management company AMP Capital Investors Limited.
Copenhagen Airports has decided to dispose of its share in NIAL as part of its strategy to focus on the development and operation of its airports in Copenhagen.
The remaining 51% interest in the share capital of NIAL will continue to be owned by seven local municipalities known as LA7, which, together with Copenhagen Airports, ran the airport as part of a public private partnership (PPP).
Boe Pahari, managing director for Europe, head of infrastructure, AMP Capital, said: “Newcastle Airport is a high quality asset with excellent facilities used by more than 4.4million passengers per annum.
“The airport already has the necessary infrastructure for further developing its commercial business and for meeting future demand for traffic growth.
“AMP Capital has long-standing experience investing in airports with its investment in Melbourne airport dating back to 1997.
“We look forward to working with the LA7 and Newcastle Airport management to add value and support the long-term growth and development of the airport and the North East UK economy.”
AMP Capital is a specialist investment manager with A$126,9 billion in funds under management.
In connection with the disposal, NIAL has also decided to refinance its existing group facility and is seeking new debt funding from LA7 and AMP Capital Investors Limited.
It is expected that closing of the transaction will take place mid November 2012.
Financing for the deal is being provided by a new group of five banks – Royal Bank of Scotland, Royal Bank of Canada, Barclays Bank, HSH Nord Bank and National Australia Bank.
The new bank facilities will support the growth of the airport and by significantly reducing the level of debt in the business will also reduce interest payments.
As part of the process, six of the LA7 local authorities (South Tyneside, Newcastle, Sunderland, Gateshead, Northumberland and Durham) will make a further investment in the airport totalling £68million.
Councillor Iain Malcolm, leader of South Tyneside Council and chairman of LA7, said: “The LA7 authorities are delighted that the preferred bidder for the 49% shareholding has been selected.
“AMP Capital submitted an exceptional proposal and its involvement in running Melbourne and Launceston airports in Australia will bring valuable airport experience. We’re delighted to have them on board and look forward to working with them to maximise the potential of the airport.”
He added: “The completion of the refinancing is also great news for the region. The airport is a major asset to the North East, generating millions of pounds for the local economy every year and supporting thousands of jobs.
“As a result we viewed the further investment by the local authorities as the right thing to do, not just for the Airport, but for the whole region.”
RBC Capital Markets acted as financial adviser and Baker & McKenzie acted as legal adviser on the transaction.