KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) will now pay €279.23 million (RM1.2 billion) for the remaining 40% stake in the Sabiha Gokcen International Airport (ISG) and LGM Havalimani Isletmeleri Ticaret ve Turizm (LGM), 2% less than the original sum of €285 million. The airport operator said it has completed the acquisitions from the Limak Group.
“The total cash consideration for the acquisitions was adjusted in accordance with the provisions of the SPA (sales and purchase agreement) from €285 million to €279.23 million,” MAHB said in a filing with Bursa Malaysia yesterday. MAHB chief finance officer Faizal Mansor said post-acquisition, MAHB will be able to recognise earnings from ISG’s operations, something which it could not do without a controlling stake in the Turkish airport.
As for profits, Faizal is confident that the loss-making airport would start to contribute as early as this year.
“ISG was loss-making from 2010 to 2012, losing about RM100 million a year. In 2013, that came down to RM55 million,” he told a media briefing yesterday.
“We think that in 2014, this would come down further and we would be able to close at RM30 to RM35 million in losses. Come 2015 or at the latest in 2016, we would have a share of profits from ISG,” said Faizal.
He said that purchasing the whole of ISG represents an “important milestone” for the airport operator and positions it to be a “serious player” in the international airport acquisition arena.
“More and more airports are going through privatisation. We want to position ourselves as one of the players [to privatise airports].”
“This acquisition is a milestone for us — to put a mark within the airport privatisation industry. This opens a lot of doors for other privatisation opportunities,” said Faizal.
Besides Turkey, MAHB has a portfolio of airports overseas including India and the Maldives. It also offers its airport management expertise to international airports, recently securing a RM192.15 million deal to repair and maintain the Hamad International Airport in Doha.
This article first appeared in The Edge Financial Daily, on January 6, 2015.