MAHB completes purchase of Istanbul airport at $334M

Sabiha-Gokcen-Airport

Malaysia Airports Holdings Bhd (MAHB) will now pay $334 million 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 $335 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 $335 million to $328 million,” MAHB said.

MAHB chief finance officer Faizal Mansor said post-acquisition, MAHB would 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 will start to contribute as early as this year.
“ISG was loss-making from 2010 to 2012, losing about $27 million a year. In 2013, that came down to $15 million,” he said.

“We think that in 2014, this will come down further and we would be able to close at $8.3 to $9.7 million in losses. Come 2015 or at the latest in 2016, we will have a share of profits from ISG,” said Faizal.

He said that purchasing the whole of ISG represented an “important milestone” for the airport operator and positioned 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 an $53 million deal to repair and maintain the Hamad International Airport in Doha.

(The Edge Financial Daily)

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