GIP taps technical advisor for possible Edinburgh Airport sale

Breaking News 11 August

GIP taps technical advisor for possible Edinburgh Airport sale

Global Infrastructure Partners (GIP)
has appointed a technical advisor ahead of a potential sale of Edinburgh Airport, which is expected to formally launch after summer.

Technical advisory firm ICF has been tasked to do preparatory work on the sale of the asset, while GIP is in the process of selecting a financial advisor, according to two sources familiar with the situation.

No final decision has been taken on whether to launch a sale, a third source said.

GIP declined to comment, while ICF did not respond to requests for comment.

GIP owns an 80.9% stake in Edinburgh Airport, while its co-investors comprise Australia’s sovereign wealth fund Future Fund and Australian superannuation fund Australian Retirement Trust, each with a 9.55% stake, according to the latest available accounts for 2022.

The potential sale of Edinburgh Airport would mark the second GIP divestment of a major UK airport since December 2018, when it sold its 50.01% stake in London Gatwick Airport to Vinci, and the first such disposal after COVID-19.

The appointment of ICF as technical advisor on the potential sale also comes a few months after GIP’s Edinburgh Airport raised GBP 450m of debt as Scotland’s largest airport continues its recovery path to pre-pandemic traffic figures.

Traffic in 2022 was 11.3m passengers, up from the 3m passengers who used the airport in 2021 and 76% of the 2019 level of 14.7m passengers. Any sale of Edinburgh Airport would also allow GIP to tap into the expected traffic recovery this summer.

The recovery in passenger numbers boosted the airport’s EBITDA for the year ended 31 December 2022 to GBP 118.4m, up from GBP 21.6m in 2021 and 84% of its 2019 EBITDA, according to Edinburgh Airport’s 2022 annual report.

GIP bought Edinburgh Airport in 2012 from Ferrovial-owned BAA for GBP 806.6m, equivalent to 16.7 times 2011 EBITDA of GBP 48.3m. Traffic grew strongly between the acquisition and 2020, with passenger numbers up by more than 50% from 9.2m in 2012.

In the UK, GIP also manages a continuation fund holding a 49.99% stake in Gatwick Airport, in a process that was completed shortly after the sale of GIP’s 50.01% stake in Vinci.

GIP also sold in 2016 its 75% interest in London City Airport to a consortium comprising AIMCo, OMERS, OTPP and Wren House Infrastructure Management.

In other airport transactions in the UK, London-listed Esken started earlier this summer a process for the sale of its London Southend Airport, advised by Canaccord Genuity.

Macquarie Asset Management and Ferrovial-backed AGS Airports, the operator of Aberdeen, Glasgow and Southampton Airports, launched the refinancing of around GBP 800m of loans maturing next year.

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