Istanbul mega airport stake up for sale – report
U.S. investment bank Lazard has been instructed to find buyers for a stake in Istanbul’s new airport, Bloomberg reported citing people with knowledge of the matter.
The new airport on the Black Sea coast east of Istanbul, opened to much fanfare by President Recep Tayyip Erdoğan in October, could be the world’s largest should all construction phases be completed. The facility is the flagship of Erdoğan’s so-called megaprojects; a series of huge infrastructure investments that are designed to develop the economy and make Turkey a global power.
Aeroports de Paris and Turkish airport operator TAV, which lost its interest in Istanbul’s Ataturk Airport after it was shut down to make way for the new facility, are among interested parties, two of the people said, according to Bloomberg. Vinci SA is also interested, they said.
The attempt to sell the stake comes in an economic downturn and as Italy’s Astaldi seeks buyers for its share in a nearby bridge spanning the Bosporus that helps connect the airport to the road system. Turkey’s economy has slumped into a recession after a currency crisis, which has rendered the foreign currency debts used to finance construction more expensive to repay.
Five Turkish builders with close ties to Erdoğan’s government won a contract to build and operate the airport under umbrella firm IGA. One of the partners – Kolin Insaat – sold its 20 percent stake earlier this year. Foreign airlines started flying to the airport last month, following Turkish Airlines, which had already started operations there.
With borrowing of 5.7 billion euros ($6.4 billion), IGA has the highest corporate debt load in Turkey. Payments for the 25-year lease total 1.1 billion euros a year.
The high cost of the lease is likely to deter potential buyers, according to one of the people, Bloomberg said. The facility's surface area dwarfs that of Manhattan.