Interest building up as airport auction looms

05 March 2019 - 12:00 am UTC

Foreign and national companies are preparing bids for the three airport lots set to go to auction on 15 March.

Potential bidders include international companies Fraport, Zürich, Vinci, Changi and Aena as well as local firms CCR and Pátria

Companies have been analyzing the projects since the government published tender documents in the country’s official gazette in November 2018. 

Aviation sector specialist Felipe Bonsenso of law firm Costa & Lasalvia Advogados said that there were higher levels of interest in this latest lot of concessions because they are now awarded in lots, which diversifies the portfolio. 

The winners of Brazil’s previous rounds of concession are all understood to be interested, including three European companies – Fraport, Vinci and Zürich. A spokesperson for Zürich confirmed that the company was looking at the next round but could not confirm whether they would bid or on which lot. Fraport and Vinci did not reply in time for publication. 

In the 2017 auction, Fraport won the concession of the Fortaleza airport in Ceará and Porto Alegre airport in Rio Grande do Sul. Vinci won Salvador airport and Zurich won Florianópolis. 

Another European bidder Inframation understands to be interested is Spanish airport operator Aena. A spokesperson for Aena said that the company was paying attention to the projects but had not yet decided whether to bid. 

Aside from European bidders, two Brazilian companies are interested in bidding, said sources briefed on the situation. 

CEO of CCR Airports Eduardo Camargo confirmed that CCR are interested in the new concessions but could not yet confirm which lots. He also said that that the company is looking at any opportunities in the rest of Latin America, in any country with investment grade, notable examples being Chile, Colombia and Peru. 

CCR currently holds stakes in Confins airport in Belo Horizonte with Zurich. When asked why CCR did not participate in the previous auction, Camargo said it was due to the company’s economic situation at that time. 

Blackstone-backed Brazilian investment firm Pátria is also understood to be looking at the projects as they fit into their investment criteria. Pátria declined to comment.

Singapore’s airport company Changi is also considered as a possible bidder as it currently holds Rio Galeão airport with Infraero. A spokesperson for Changi Airports International (CAI) said that the group is “closely following developments of the Brazilian government” in relation to this round of airport auctions and Infraero’s stake in Galeão. 

Massami Uyeda Junior of Arap Nishi, advisor to Changi and Odebrecht on the bid for Rio Galeão, said that he sees it unlikely that Changi will bid as it overpaid for Galeão and is now required to make payments of BRL 1bn per year, a financial model that no longer works. 

Other rumored sponsors include Argentina’s Corporación América, who currently holds the concession for Brasilia’s international airport with state airport operator Infraero. Corporación América did not reply in time for publication. 

Long-term financing in Brazil is generally provided by the Brazilian development bank BNDES. However, Guilherme Alice, head of specialized finance for Brazil at SMBC, said that the bank will probably look to finance some of the projects in what he called an “an important auction.” 

The new concessions include three lots. The first lot of six airports in the northeast includes the major International Airport of Recife (Pernambuco), along with five smaller ones: Maceió (Alagoas), Aracajú (Sergipe), João Pessoa and Campina Grande (Paraíba) and Juazeiro do Sul (Ceará). The reference required investment is BRL 2.14bn (USD 566.6m).

The second lot originally included five airports in the state of Mato Grosso including the capital Cuiabá’s international airport with regional airports in Rondonópolis, Sinop and Alta Floresta with an investment of BRL 763m.

The third lot includes the Macaé airport in Rio de Janeiro and the Vitória airport in Espírito Santo. The investment in this lot is BRL 630m.

The Brazilian government recently announced that it intends to sell Infraero’s 49% stakes in four first round concessions in the next two years – including stakes in Guarulhos in São Paulo, Galeão in Rio de Janeiro, Confins in Belo Horizonte and Brasilia airport. 

In the next few years, other airport lots are also set to come to auction and these will include Congonhas in São Paulo and Santos Dumont in Rio de Janeiro. These are Infraero’s most lucrative airports.

 

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