BAA has agreed to sell Gatwick Airport for US$2.5 billion to investment fund Global Infrastructure Partners, in an effort to clean up its balance sheet and after being ordered by the UK Competition Commission to make the sale. Dow Jones reported.
BAA said it will use the proceeds to repay debt. A $91.9 million portion of the sale price is conditional on future traffic performance and the buyer's future capital structure.
Global Infrastructure Partners, an investment fund controlled by Credit Suisse Group and General Electric, beat several bidders in its offer, which was higher than the $2.2 billion Gatwick had been expected to fetch.
Global Infrastructure Partners invests in infrastructure in industries including energy, shipping and waste management, and holds a 75 percent stake in London's City Airport.
Initial estimates of the airport's value had been as high as $3.3 billion, though that wasn't seen as a realistic price in light of declining air traffic at Gatwick and the squeeze on credit available to potential purchasers.
According to its regulatory accounts for the year ended March 31, Gatwick's regulatory asset base - or value of the regulated operating assets upon which its owner earns a return - was $2.6 billion.
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