Ryanair eyes stake in Spanish Airports listing

 

The partial privatisation of Spanish airports operator AENA should see its shares list on the stock market in late November with a small tranche reserved for the public - a litmus test for domestic investor faith in an economic recovery.

The sale of the world's biggest airports operator still has several hurdles to overcome, but a source familiar with the situation told Reuters the pricing process should be finalised between global coordinators and the government in September.The sale of a 49% stake of the group will be given the green light by the stocks commission around the end of that month, the source said, paving the way for one of Spain's biggest privatisations.

Of that non-controlling stake, a little under half - or 21% of the total company - is slated for between two and four core shareholders in a separate auction process. This is likely to rule out some candidates such as infrastructure managers Ferrovial and Abertis which only invest in companies where they hold a majority stake. European low-cost airline Ryanair said in June it was interested in participating in the privatisation.

The other 28% is to be sold to domestic and foreign investors, primarily financial institutions.

"Within that 28%, around 10 to 15% (around 3 percentage points) is earmarked for a retail tranche, which seems reasonable," a source close to the process told Reuters.

"It has not been finalised, but that is the idea," he said.

Spain has this year emerged from a bruising recession which followed a housing crash in 2008. But almost one in four are still unemployed, and many ordinary Spaniards are much poorer.

Thousands of small investors were badly stung during the financial crisis by the sale of complex investment vehicles by unlisted savings banks and the listing of lender Bankia in 2011.

Bankia was eventually rescued in the country's biggest corporate bailout, from which it has now started to recover.

With a general election due by next year, the centre-right government will have to ensure the success of the process before forging ahead.

Up to now, indications by financial analysts point to an enterprise valuation of around EU16 Bln for the whole of Aena, which runs 46 airports in Spain alone.

AENA made a profit of EU597 Mln in 2013 for the first time, after a radical restructuring process including staff cuts and after benefiting from airport tax hikes.

The government, which will use some of its proceeds to reduce Aena's debt, is expected to net only about EU2.2 Bln from the sale to help whittle down the public deficit. The government has said it aims to make management of the company more efficient and attract more tourist flights.

AENA owns 46 airports at home and also has international interests such as a stake in London's Luton Airport.

Spain is the world's third-biggest tourist destination behind France and the United States. Aena is the biggest airport operator in the world in terms of passengers, handling 187.4 million travellers last year.

Banks Santander, BBVA, Bank of America, Merrill Lynch, Goldman Sachs and Morgan Stanley have been appointed to run the sale process.

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