The government has been considering various sale options including a stock market flotation, which has stirred interest among airport operators worldwide. The sale announcement comes as airlines are feeling the pain of record oil prices, which hit an all-time high of $135.09 a barrel last month. Earlier Monday, the International Air Transport Association said a significant decline in global airline profitability, or even losses, looks inevitable this year.
However, Prague Airport has benefitted from fast economic growth in the central European country and the region, boosting traffic by 7.2% in the Q1 of 2008, and it expects further growth. “We decided on a sale of the government’s 100% stake and we ordered the finance minister to launch a tender for the main adviser for the sale,” Prime Minister Mirek Topolanek said.
Deputy Minister Ivan Fuksa told Reuters in a telephone interview that details of the sale criteria would be proposed by the adviser, which should be selected by the end of the year. Fuksa said price would be the key criteria for the sale, which is expected to be completed by the H2 of 2009, but the government would also look at the bidders’ development plans. He added similar transactions usually generate a sale price of 15 to 23 times earnings before interest, tax, depreciation and amortization (EBITDA). The airport posted 2006 EBITDA of 2.9 billion koruna but has not yet reported a 2007 figure. Net profit jumped 14.4% last year to 1.1 billion koruna.
Finance Minister Miroslav Kalousek has said he would not recommend selling the airport for less than 100 billion Czech koruna ($6.17 billion). Traffic has grown steadily in the past years thanks to fast economic growth and the emergence of budget airlines which boosted travel to the historic Czech capital. The airport served 12.44 million passengers last year.
Under an agreement between the government and the central bank, proceeds from the sale will not be converted to Czech crowns on the open market in order to avoid an upward pressure on the currency.
A number of airport companies have expressed interest in Prague Airport including Austria’s Flughafen Wien, Germany’s Fraport, France’s Aeroport de Paris, as well as Czech private equity groups PPF Investments, Penta Investments and J&T. (Reuters)
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