Goldman Sachs, HSBC prepare BAA stake sale

 
City A.M. Reporter
SPANISH infrastructure group Ferrovial has hired Goldman Sachs and HSBC to sell a ten per cent stake in BAA, Britain's largest airport operator and the sale will begin next week.

The infrastructure group, which owns 55.9 per cent of BAA, announced the stake sale in October and could raise up to €200m (£169m) from the deal according to analysts.

By reducing its stake below a majority, Ferrovial will no longer need to consolidate the subsidiary's debt on its own balance sheet, which will more than halve its €24.5bn debt pile.

BAA, Ferrovial, Goldman Sachs and HSBC have declined to comment.

BAA's current minority owners are Britannia Airport Partners, managed by Canada's Caisse de depot et placement du Quebec, which owns 26.5 per cent, and Singapore's biggest sovereign wealth fund, GIC, with 17.6 per cent.

The sale is likely to follow a standard auction format, lasting a few months and with two rounds of bidding.

In the coming days the two banks will start to contact a wide range of potential buyers, some of the people said.

These are likely to include pension and infrastructure funds from Canada, Australia and Europe, and sovereign wealth funds – the types of investor that have shown interest in owning airport stakes.

For example, Global Infrastructure Partners bought Gatwick airport from BAA last year.

GIP later sold stakes to the Abu Dhabi Investment Authority (Adia), South Korea's National Pension Service (NPS), and California Public Employees' Retirement System (Calpers).

Last year the Competition Commission ordered BAA to sell Stansted and either Glasgow or Edinburgh Airport, a decision BAA is still appealing.

The commission asked for fresh feedback last week and said it could extend the break-up's timetable.

A pick-up in business flights at Heathrow, London's busiest airport, has helped stem losses at BAA.

Pre-tax losses for the first nine months of this year shrank by three-quarters to £193m , as revenues rose 4.4 per cent to £1.54bn.

Shares in Ferrovial stood 0.8 per cent lower by 1450 GMT at €7.49 a share.

The stock has shed almost 10 per cent this year – beating a 20 per cent fall in Spain's IBEX 35 index but lagging the 5.2 per cent drop in the Stoxx Europe 600 construction and materials index.