Fraport scores double win in Brazilian airports privatization

During Brazil’s third round of airport privatizations decided at a public auction in Sao Paulo today, Fraport AG scored a double win by placing the top bids of 1,505.75m Reais (about €446.81m) for Fortaleza Airport and 382.01m Reais (about €113.36m) for Porto Alegre Airport. As a result, Fraport emerged victorious against strong international competition vying for the two Brazilian airports currently operated by Brazil’s state-owned Infraero. Along with the concession price, Fraport will pay a fixed fee amounting to five-percent of the airport’s annual revenue. The concession will run for 30 years at Fortaleza and for 25 years at Porto Alegre. Currently holding a 100% stake, Fraport will be the sole owner and participant of these concessions. Thus, the concessions and future results will be fully consolidated at the Fraport Group level. Following the takeover of the concessions, Fraport AG expects an additional accumulated EBITDA at the Group level resulting from the two airports of around €350m during the first five years and an accumulated negative contribution to the Group result ranging from the mid to high double-digit million euros. Due to the takeover of the concessions and the mandatory capital expenditure, Fraport AG expects an increase in Group net debt by up to around €700m in the first five years.