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Hungary exercises option to sell airport stake

The Hungarian National Asset Management Company (MNV) on Wednesday exercised an option to sell the state's remaining minority stake in Budapest Airport, the operator of the capital's Ferenc Liszt International Airport, the National Development Ministry said on Friday.

Payment for the stake is to be transferred within 30 days of the transaction.

The ministry said a week earlier that the state would use its put option to sell its 25%-plus-one-vote stake to Budapest Airport's majority owner, a consortium led by Germany's Hochtief called Airport Hungary Tanácsadó, by the June 18 deadline.

The ministry put the value of the state's stake at HUF 36.6 billion.

"Because of the irresponsible privatization of the earlier profit-making, wholly state-owned company by its majority owner, the Socialist government, in 2005, the minority stake remaining in state hands has lost a significant part of its value," it said.

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

The ministry said there was no opportunity to repurchase the majority stake in Budapest Airport as the Hochtief group wished to sell its airport assets to a financial or professional investor.

The airport, earlier called Ferihegy International Airport, was privatized in December 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 in May 2007 for €1.9 billion without assumed debt, equivalent to HUF 469 billion at that time. In the original privatization process the consortium led by Hochtief was runner-up with an offer of HUF 406 billion.