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COUNCIL NAMES PREFERRED BIDDER FOR INTERNATIONAL AIRPORT

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Devon CC has announced that South West Airports Consortium is its preferred bidder to acquire a majority holding in...
Devon CC has announced that South West Airports Consortium is its preferred bidder to acquire a majority holding in Exeter International Airport.

The announcement is a key milestone in the council's strategy to ensure the continuity and development of Devon and Cornwall's most popular airport.

A council spokesman described the bid from SWAC as 'substantial and serious, offering continued success and growth for Exeter International Airport, and the potential to strengthen its key role within the regional economy.'

The move does not mean a sale has been completed, but it does mean that the council, assisted by its financial advisers KPMG, will now enter into detailed negotiations exclusively with SWAC to reach a final agreement.

The spokesman explained: 'It would therefore be obviously premature to discuss the financial aspects of any bid while negotiations are ongoing.'

SWAC has emerged as the current front-runner from a lengthy selection process which began with more than 70 expressions of interest in Exeter International Airport.

That initial group of 70 was reduced to 17 potential bidders and from those five were then shortlisted. SWAC scored highest against the sale objectives set by the county council.

The council rated all bidders against the following objectives:

- To secure the continued operation of the airport

- To attract as wide a range of air services to Exeter as possible

- To maximise employment opportunities at or linked to the airport

- To ensure the needs and concerns of Airport company employees are properly considered

- To obtain a financial return from the county council's past investment in the Airport for the people of Devon and the council's services to the public

- To ensure that airport expansion is supported by timely investment

- To maintain good external working relationships

The council currently owns all the shareholding in Exeter International Airport as well as adjoining land earmarked for commercial development, known as Skypark.

Considerable expansion of the Airport facilities will soon be required to cater for the projected growth in passenger numbers.

The council announced in July 2003 that it is unlikely to be able to provide the necessary finances to invest in the expansion of the airport and therefore recognises the need for private sector involvement.

The council said that although the operation of the airport is not one of its key services - which include education, social services or environment - it is considered vital to the local economy and therefore its successful future is of paramount importance to Devon.

SWAC comprises of Macquarie Airports Group and Ferrovial.

MAG is a specialised airport investment fund managed by the Australian investment bank Macquarie. MAG is majority owned by the Australian listed airport company Macquarie Airports, the second largest private investor in airports globally. The Macquarie Bank group is a major long-term investor in infrastructure around the world and holds investments in other UK companies such as South East Water, Energy Power Resources (UK), and the M6 toll road.

Ferrovial is a major European infrastructure group and has a sizeable presence in other businesses in the UK providing nearly 20% of the company's total revenues and 11.8% of operating profit in 2004. Ferrovial is one of the UK's leading services companies, involved in facility management and infrastructure maintenance through its subsidiary Amey. Amey owns 66% of Tube Lines, a company with a 30-year contract to maintain and renovate three London Underground lines. In Ireland, through Cintra, it has the concession for the country's first toll road, the N4/N6.

Working with SWAC and in parallel to the offer for Exeter International Airport, the property company Rokeagle Limited has also made a bid for Skypark, the proposed business park adjoining the northern boundary of the airport. The council announced today that it wished to have further detailed discussions with both parties about this offer.

Between them, Macquarie and Ferrovial hold significant airport investments at Belfast City, Birmingham, Bristol, Brussels, Copenhagen, Rome, Sydney and Antofagasta (Chile).

In bidding for Exeter International Airport, which has a long runway, scope for expansion and good weather record, SWAC say there is a clear commercial synergy between Exeter and Bristol, which would help reduce the migration of South West travellers to airports outside the region.

The recommendation to accept SWAC as the preferred bidder was approved by the council's all-party cabinet, the executive, this week and supported by the airport board at its meeting today.

Board chairman Richard Westlake said: 'This is an important step towards ensuring the continued success and development of Exeter International Airport. SWAC's bid scored highest against the county council's objectives and it is therefore sensible to pursue this further in detailed discussions.

'Exeter International Airport is immensely popular with passengers, an important employer and driving force in the regional economy. Thanks to the terrific efforts of our staff, the support of the county council and our partners, Exeter International Airport is already a success and our focus is on how we ensure that continues and is supported by the appropriate investment in the future in an increasingly competitive market-place.'

Exeter International Airport's managing director Geoff Myers said: 'I am delighted that this important stage in the process has been reached and looking forward to a speedy and satisfactory conclusion to the negotiations.'

Note

The number of passengers using Exeter International Airport during the 12 months ending 31 March 2005 were 670,690 compared to 392,445 the previous year, a 71% increase, making EIA one of the highest growth airports in the country.

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