Gatwick sold as BAA break up begins
22 / 10 / 2009
BAA is selling Gatwick Airport to US-based investment firm Global Infrastructure Partners (GIP) for £1.5 billion.
The BAA had been ordered to sell three of its seven UK airports including Gatwick and Stansted, following the UK’s competition Commission’s 2008 ruling that BAA held a monopoly on airports in the south east of England and in Scotland.
BAA has stated that the majority of the proceeds of the sale will be used to reduce its debt that stood at £9.6 billion in June.
BAA will hope that the deal will help its appeal against the enforced sale of Stansted.
It stated at the appeal this week, that the ruling to sell Stansted and either Glasgow or Edinburgh was “riven” with the appearance of bias. Also adding that the ruling was compromised because of a link between a member of the ruling panel and an organisation interested in buying the airports.
GIP is believed to have fended off a bid from a consortium that included Manchester Airports Group and Borealis, a Canadian Infrastructure fund.
GIP, backed by Credit Suisse and General Electric, already owns a 75 per cent stake in London City Airport and says it will invest to upgrade and modernise Gatwick.
The airport has suffered a dramatic decline in cargo volumes in recent years. From January to September 2009 the airport’s throughput declined 40 per cent compared to 2008.