Over the weekend it looked as if Macquarie Group was poised to snag a multibillion-pound stake in the UK’s iconic Heathrow Airport.
The Telegraph reported that the Australian asset manager was raising money to buy the stake from Spanish infrastructure giant Ferrovial—but come Monday morning, Macquarie said no offer was imminent.
Heathrow’s ownership structure has hit turbulence since Ferrovial decided to offload its shares after 17 years as the airport’s largest investor. Other investors are said to be eyeing an exit too, among them Canada’s CDPQ and Singapore’s GIC.
Ferrovial previously agreed to sell a 25% stake to Saudi Arabia’s sovereign wealth fund, PIF, and Paris-based Ardian in November for £2.37 billion, valuing the asset at just under £10 billion (about $12.6 billion).
As the UK’s only hub airport, Heathrow is a prized asset. It’s also a heavily indebted one, partly due to an industry-wide hangover caused by pandemic-era travel bans. Since Ferrovial became its largest shareholder in 2006, the airport’s debt has soared to nearly £17 billion, weighing it down with annual interest payments of almost £1.5 billion—however, its losses have narrowed in the past year.
Heathrow is not the only UK airport whose future is still taxiing down the runway after a rough few years. Last Thursday, Southend Airport’s London-listed parent company Esken officially entered administration. Like Heathrow, Southend Airport was battered by the pandemic, arguably to an even greater extent.
Under a deal reached earlier this month, The Carlyle Group will take an 82.5% stake in the business to settle a £197.5 million debt. The deals concluded a lengthy dispute dating back to 2021, when the airport—suffering from falling passenger numbers—borrowed £125 million from Carlyle.
Whatever the future of the UK airport infrastructure is in the next few years, it’s likely PE will play a bigger role than ever.
Featured image by Ugurhan/Getty Images
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