Funds line up for Hobart airport sale

13 March 2019 - 12:00 am UTC

AMP Capital, Infrastructure Capital Group, Palisade Investment Partners and QIC are interested in bidding for a 51% stake in Hobart Airport, according to sources.

Vendor Macquarie Infrastructure and Real Assets (MIRA) is close to appointing legal and financial advisers for the sale, according to several sources familiar.
Investment banks lodged bids and presented their case to MIRA two weeks ago. Several banking and fund sources have pointed to Credit Suisse, JP Morgan and RBC Capital Markets as among those lining up for the role.
Local media reports said Macquarie Capital is likely to be excluded. However, some fund and investment bank sources argue it may still get the role if other financial advisers bids are not accepted.
Sources close to MIRA said there is no deadline to sell nor a need to sell its stake.
Hobart was one of the country’s 10 fastest-growing airports in 2018, with passenger numbers rising 6.6% to 2.69m, even though it had the second smallest number of passenger movements, according to an annual federal government report on the country’s airports released this month.
The number of passengers passing through the airport has doubled in the decade since MIRA’s Global Infrastructure Fund III, Macquarie Capital and state super fund Tasplan bought it from the Tasmania state-owned Tasmanian Ports Corp. This and the announcement of new federal funding to allow direct international flights to the airport from 2020 has piqued investor interest.
It is also relatively rare for airports to come to market in Australia. 
However, last year Auckland Airport sold its 24.55% stake in North Queensland Airports to its co-shareholders –  JP Morgan Infrastructure Investment Fund, The Infrastructure Fund and Perron Investments – for AUD 370m (then USD 294m). Auckland Airport was advised by Credit Suisse and its affiliate, First NZ Capital and Minter Ellison. The acquirers were advised by RBC Capital Markets and Arnold Bloch Leibler.
MIRA and Tasplan, formerly the Retirement Benefit Funds Board, bought Hobart Airport for AUD 350m (then USD 309m) in January 2008, with Tasplan holding the minority 49.9% stake.
The airport reported a 9.8% rise in revenue to AUD 52.8m in the year through 30 June 2018. However, it reported a net loss of AUD 3.4m, a 53% improvement on the loss of AUD 7.3m reported in 2017.
A spokesperson for Tasplan declined to comment on whether it would look to exercise any pre-emption rights or sell out itself, but said it was “considering its options”.
Several fund and adviser sources have argued Tasplan is likely to hold its current share. They say the super fund would be reluctant to take the risk of owning all the airport itself, but equally would want to retain a shareholding in one of the state’s prime assets.
A spokesperson for Macquarie declined to confirm the sale or comment further.