MAHB to pay RM1.18b for full control of airport

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KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) will acquire the remaining 40% stake that it does not own in Sabiha Gökçen International Airport, giving it full control of Istanbul’s second biggest airport. The airport operator expects to complete the transaction by early 2015.

In a statement yesterday, MAHB said it will “shortly” sign a share purchase agreement (SPA) to acquire Turkish firm Limak Group’s 40% interest in Istanbul Sabiha Gokcen Uluslararasi Havalimani Yatirim, Yapim ve Isletme AS (ISG) and LGM Havalimani Isletmeleri Ticaret Ve Turizm AS (LGM) for up to €285 million (RM1.18 billion) cash. The consideration is subject to downward adjustments in accordance with the SPA.

ISG runs the airport and terminal operations of Sabiha airport, while LGM manages the commercial operations.

MAHB is exercising its right of refusal to reject TAV Havalimanlari Holding AS’ offer to acquire the remaining 40% stake for €285 million.

MAHB said it is currently deliberating on the most appropriate funding structure for the acquisition and further details on the proposed funding will be announced once finalised.

“Notwithstanding this, MAHB will secure the necessary bridging facilities and/or draw down its existing facilities to finance the acquisitions if needed,” it said.

MAHB also gave an assurance that the existing management structure of Sabiha airport will not change and the airport will continue to be managed by the existing Turkish leadership team that will report to the ISG Board as usual.

MAHB, Limak and India’s GMR Group formed a 20:40:40 consortium in 2008 for the development of the greenfield airport, with the capacity to handle up to 25 million passengers per year. MAHB was the designated airport operator partner.

Earlier this year, MAHB increased its interest in ISG and LGM from 20% to 60% when it acquired a 40% stake from GMR for €225 million and obtained joint control with Limak Group.

Shares of MAHB closed up 3.56% at RM6.69 yesterday, bringing a market capitalisation of RM9.19 billion.

 

This article first appeared in The Edge Financial Daily, on October 24, 2014.