Ferrovial acquires the concession for Sydney airport, which involves an investment of ?3.85bn

Press releases

The 95-year concession marks a turning point for the group´s airport management area

Ferrovial has a 20% stake and its equity investment totals €233mn (AUD385mn)

The deal represents the largest airport privatization ever and makes Ferrovial the largest Spanish investor in Australia

Ferrovial´s airport business has tripled in size: it now manages over 40 million passengers per year at 12 airports in Australia, the UK, Mexico and Chile

Ferrovial is now the largest construction group involved in airport management worldwide

Sydney, gateway to Australia, is the largest airport in the country, with an annual volume of traffic of more than 25 million passengers

Ferrovial is the world leader in private infrastructure management, with committed investments of nearly €2bn

Madrid, 25 June 2002
Ferrovial has made a huge leap forward in the airport management market through acquiring a 95-year concession for Sydney airport, Australia´s largest, which handles more than 25 million passengers per year. Ferrovial is now firmly established as the largest construction company in the world that is involved in private airport management and one of the leading international companies in this field. With this operation, Ferrovial has tripled the revenues of its airport management business; it is estimated that over 40 million passengers will use the 12 airports owned by Ferrovial, located in the UK, Mexico and Chile, in addition to Sydney.

Investment capability for the largest-ever airport privatization
The transaction entails a total investment of €3.85bn (AUD6.3bn) and represents the largest airport privatization ever. Ferrovial has a 20% stake in the deal, amounting to an investment of €233mn (AUD385mn), which makes the group the largest Spanish investor in Australia and principal investor in the winning consortium, Southern Cross Airports Corporation. The consortium includes Macquarie (Ferrovial´s partner in the toll road business, with a 53% stake via various funds), Hochtief (15%) and Abbey National (5%).

The rival consortia bidding for Sydney were Gateway and Connet. Gateway consists of a number of funds which benefit from the technical support of the British Airports Authority (BAA), the largest airport operator in Europe and one of the largest in the world. Connet, headed by Vancouver airport, also involved investment funds, ABN Amro Bank and others.

Through the award of the Sydney airport concession, Ferrovial re-emphasizes its financing capabilities and ability to attract funding. The deal necessitates heavy investments within a very tight deadline: total payment within a number of days (10% one day after announcement of contract award and the remainder within 5 days). Financing, which was completed when the offer was presented, is guaranteed by a consortium of banks.

Sydney - Australia´s number one airport
The airport is situated 8 km south of the city. The installations (modernized for the 2000 Olympics) consist of three runways, four passenger terminals, six cargo terminals and six car parks (with a total of 8,652 spaces).

Sydney is the major gateway into Australia. In 2001, the airport registered a traffic volume of 25.4 million passengers (more than Orly airport in France and similar to Rome airport), and 50% of the country´s international traffic (destinations are mainly London and Paris, in Europe, and Hong Kong, Bangkok, Singapore and Kuala Lumpur, in Asia). The domestic market is divided between Qantas and Virgin Blue, which have long established Sydney airport as their base. In 2001, the airport recorded operating profit of €138.1mn (AUD226.5mn) on revenue of €230mn (AUD377.6mn).

Expansion and growth: key reasons for choosing Sydney
Sydney marks a watershed in Ferrovial´s airport management business and is a giant leap forward for one of its strategic areas - transport infrastructure management.

Ferrovial´s presence in the battle to manage Sydney airport is amply justified:
. the high returns on the deal (IRR 16%-20%) and the rapid return of cash to the Group;
. plus the prospect of growth in air traffic revenues, enhanced by secure but flexible tariff regulations;
. the installations are modern, capable of absorbing traffic over the next twenty years without requiring heavy investments in infrastructure;
. the possibility of boosting commercial (mainly, duty-free shopping) and property revenue considerably: airport has a strategic position, near the city center and to the south-east, where new development is concentrated; and
. the operation includes the preferential right to build and operate a new airport in Sydney, if one becomes necessary in the future.

Ferrovial will also take an active part in managing the airport since it will have two seats on the Board and one on the Strategy Committee.

The Sydney deal highlights Ferrovial´s determination to expand its concession business, where it is already world leader, and the airport management area in particular. It also positions the company in an OECD country with sizeable growth potential.

Ferrovial in the private management of airports
Since it moved into this market slightly over three years ago, Ferrovial has established itself as the largest construction company in the world and one of the top international construction groups in the airport management field.

Ferrovial now manages 12 airports handling over 40 million passengers: Sydney, Bristol (the largest airport in south-west England, which Ferrovial owns jointly with Macquarie), Cancun (plus eight others in south-east Mexico) and Antofagasta, in Chile.

Focused on continuity and growth, business strategy is geared towards:
. airport concessions;
. significant stakes in large airports;
. controlling holdings in regional airports;
. expansion of ground handling and other key activities of airport management.

Ferrovial is the world´s leading private sector developer of transport infrastructure, with nearly €2bn in committed investment, of which €340mn are allocated to airports. In addition to the 12 airports, it also manages 15 toll roads in Spain, Portugal, Chile and Canada through subsidiary Cintra, as well as more than 180,000 parking spaces.


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