Hungarian Prime Minister launches new effort to take control of Budapest airport
Hungarian Prime Minister Viktor Orban has launched a new effort to wrest control of Budapest airport from its international investor owners.
The government submitted a second offer to buy the airport after the first was rejected as too low this summer, according to two people familiar with the matter. The offer price for the airport could not be determined.
The airport, which was fully privatized in 2011, is majority owned by the Public Sector Pension Investment Board of Canada, which has a 55% stake through its German airport investor AviAlliance.
GIC, the Singaporean sovereign wealth fund, holds 23 percent, while a second Canadian pension fund manager, the Caisse de depot et placement du Quebec (CDPQ), holds the remaining 21 percent.
AviAlliance and CDPQ declined to comment, while Singapore’s GIC did not respond to a request for comment.
The Hungarian government declined to comment, but announced in May that it would make a coordinated effort to buy a majority stake in the airport.
The government’s continued interest comes despite the consortium of foreign investors repeatedly declaring their desire to retain the asset, which would have great potential for growth.
The owners said in May they were “committed to the airport for the long term”, while in July AviAlliance said it “deeply hopes[d] to have the possibility of remaining invested in this airport ”when it confirmed the government’s first non-binding offer.
But the Orban government has made taking back control of key Hungarian infrastructure and other assets a priority, and it raised the equivalent of € 4.4 billion in a series of currency bond issues the month. latest.
A person familiar with the government’s plans said part of the proceeds from the bond issue could fund the airport deal.
“It is difficult to rate an airport without having proper investment plans and traffic forecasts, but for an initial rough figure, I would expect the airport to be valued between $ 4 billion and $ 5.5 billion. ‘euros, “aviation consultant Martin Fossati said.
Orban has already reshuffled the ownership of the country’s infrastructure in other ways this year. His government has decided to place around 2,000 km of freeways and public roads under a 35-year concession, including plans to extend the network by hundreds of kilometers.
He said he was aiming for majority national ownership in key sectors, including finance and retail, as well as to gain control of infrastructure assets.
Orban has criticized the privatization of the airport for years and his government has in the past threatened to wrest control of the airport from its current owners.
The consortium of foreign owners first invested in the airport in 2007, when they took a stake of around 75 percent. They acquired the remaining 25 percent of the Hungarian state in 2011.
The Eastern European aviation market is expected to grow rapidly as incomes rise and people travel more, including moving from road and rail to air.
Only 3.9 million passengers used the airport in 2020, but the number of passengers had increased rapidly in previous years, from 11.4 million in 2016 to 16.2 million in 2019.