Airports operator BAA aims to implement a refinancing by the end of the second quarter of this year after describing today’s new increased price controls for London Heathrow and Gatwick as an important milestone.
The UK Civil Aviation Authority has issued price controls for 2008-13. These show a sharp rise in the maximum charge – in excess of 20% at both airports for the year beginning 1 April 2008 – to help fund major infrastructure and service improvements.
Ferrovial-owned BAA, which will invest £4.8 billion ($9.7 billion) over the next five years, says the review does not recognise sufficiently the “scale of the task”, the pressures of handling large infrastructure projects, the full cost of increased security requirements, and the impact of the credit market turmoil.
But the price caps are higher than the CAA originally proposed in November and BAA says publication of the regulatory settlement marks an important milestone in its refinancing and enables it to proceed to finalise the details of the refinancing.
“BAA intends to implement the refinancing which includes a migration of existing bondholders into an investment grade, ring-fenced structure backed by the designated assets of the group by the end of the second quarter of this year,” it says.
“Plans for the refinancing are well advanced and BAA is actively engaging with key parties including the rating agencies.”
Yesterday BAA announced the sale of its World Duty Free Europe business to Italian catering and retail firm Autogrill for £546.6 million, the proceeds of which will be used to repay debt.
Source: flightglobal.com's sister premium news site Air Transport Intelligence news