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Gov't wants to get rid of BA stake

The government is to sell its stake in Budapest Airport, the company operating Budapest Liszt Ferenc Airport, according to a government resolution dated June 9, published in the latest issue of the official gazette Magyar Közlöny.

Hungary holds 25% plus one vote in Budapest Airport. Airport Hungary Tanácsadó, a consortium led by Germany's Hochtief, holds the remaining shares.

The government will call its option to sell the stake to Airport Hungary Tanácsadó, by June 18, the National Development Ministry said in a statement on Friday.

The Ministry said the stake is worth about HUF 36.6 billion.

"The wanton privatization of the once profit-making wholly state-owned company by the previous Socialist government in 2005 has eroded a significant part of the state's remaining minority stake," the statement said.

"Because of Budapest Airport's loss-making operation, the Hungarian Asset Management Company has not been paid any dividends by Airport Hungary Tanácsadó in years, but received only a much smaller dividend compensation," it added.

The Ministry said there was no opportunity to buy back the majority stake in Budapest Airport as Hochtief  wants to sell its airport assets to a financial or strategic investor.

Earlier press reports said the government might renationalize Budapest Airport in the coming months.

Weekly Heti Válasz earlier this week reported on its website that the government is "very likely" try to renationalize Budapest Liszt Ferenc International Airport in a manner "conform to the market" by July or August. Spain's Grupo ACS is expected to boost its stake in Germany's Hochtief, which owns Budapest Airport, over 50% by July. Grupo ACS is reported to want to sell Hochtief's airport assets.

In its printed version published on Thursday, the paper also said Chinese companies have expressed interest in BA, but only if the state of Hungary also holds a stake. Heti Valász said it learnt from government circles that Budapest's international airport could be important for Beijing, and Chinese companies could show interest in Budapest Airport, but only in an alliance with the Hungarian state. The Chinese want to see an express road built between Budapest and the airport and they are also prepared to buy troubled Malév, the paper said.

The airport, earlier called Ferihegy International Airport, was privatized in 2005. The UK's BAA paid HUF 465 billion in the transaction and promised to invest a further €260.6 million at the airport by 2011. BAA was acquired by Spain's Ferrovial in 2006 and Budapest Airport was sold to Hochtief for €1.9 billion in 2007.