Fraport secures bank financing
Four international lenders and Alpha will fund consortium’s takeover of 14 Greek regional airports
Fraport Greece has reached an agreement with four international credit institutions and a local bank for the financing of the privatization project by the German-led consortium concerning 14 regional airports around Greece.
The funding will go toward both the one-off down payment (the “acquisition facility”) and an amount set aside for investments in infrastructure (the “capital expenditure facility”), according to banking sources from abroad. At the same time, significant issues that are the responsibility of the state remain unresolved – such as the staffing of the airports’ medical offices with doctors and nurses – that might cause problems to the March 15 transfer deadline.
The total financing amounts to 1.5 billion euros, with 40 percent of that coming from Fraport Greece stakeholders. The financing plan has been submitted to the state for approval and is under examination by the country’s sell-off fund, TAIPED, and its concession consultants.
The participating lenders are the European Investment Bank, the European Bank for Reconstruction and Development, the International Finance Corporation (a World Bank subsidiary), the Black Sea Trade and Development Bank and Alpha Bank. All five banks have made their board decisions and the official signing is expected to take place in Athens at the end of February.
The sealing of the airport concession agreement requires a down payment of 1.23 billion euros, and, according to the contract with the state, Fraport Greece has committed to invest some 330 million euros in improving the 14 air- 623.47 1.0675 ports up to 2020. The consortium will also pay rent of 22.9 million euros per year for the 40 years of the contract’s duration.
According to Fraport sources, though, an additional 70 million euros is expected to be paid in the short term, taking the investment sum to 400 million. Just under a quarter of that (about 95 million euros) will concern Thessaloniki’s Makedonia Airport, the same sources added.