Inside Financial Markets

AMP Capital sets To Take Port Hedland Airport Lease

AMP Capital and Infrastructure Capital Group have won an auction for Port Hedland International Airport, with a $165 million bid and commitment to spend $40million upgrading the airport over the next five years.

Port Hedland councillors will meet on Tuesday night to decide whether to accept the $205 million proposal, which would see AMP and ICG operate the airport for the next 50-years.

Port Hedland's council will vote whether to accept a $205 million bid from AMP Capital and Infrastructure Capital Group on Tuesday.
Port Hedland’s council will vote whether to accept a $205 million bid from AMP Capital and Infrastructure Capital Group on Tuesday.

The winning bid was revealed in a notice of meeting and agenda released by the Town of Port Hedland.

The council is expected to approve the bid, which comes in above the $150 million “fair value” price as determined by the council.

A deal is expected to be announced later this week.

Port Hedland International Airport’s 50-year lease is believed to be down to two horses; infrastructure manager AMP Capital and the IFM Investors and Palisade Investment Partners-owned Airport Development Group.

Sources said the hammer was set to fall on the $200 million-odd auction, with a deal due to be signed by the end of the month.

The airport’s owner, the Town of Port Hedland Council, and adviser The Airport Group, reckon the asset has a $150 million fair value.

However it is understood they have had no qualms telling bidders they want offers well above that mark, and want to see the potential new owners think about developing the site as a logistics hub and considering non-aviation revenue.

As usual, the potential buyers reckon there is plenty of blue sky in the council’s sales pitch. And they have also spent plenty of time thinking about the commodities cycle and what it will mean for passengers on Qantas Airways, Virgin Australia and chartered flights going through the airport.

The airport has also been earmarked for a $100 million redevelopment to provide a well-serviced gateway for the region.

The two remaining bidders are well known to each other and others in the aviation industry.

AMP Capital is the largest investor in Australia Pacific Airports Corporation, which owns Melbourne and Launceston airports. AMP manages about a 45 per cent stake on behalf of its own funds and third-party clients.

Elsewhere in infrastructure, parties running the numbers on NSW high-voltage transmission network Transgrid are bunkered down with only a fortnight left until final bids.

It’s understood parties are starting to narrow in on a potential indicative bid price, after more than six months of due diligence and three weeks in the official data room. All the various consortia members are said to be in town this week, as investment committees start sharpening their pencils.

Sources said most bidders would know their indicative offer by this time next week, with the final week reserved for documentation and terms around the bids.

Four or five groups are expected to be taken through to the second stage. The government, along with advisers Deutsche Bank and UBS, are expected to call for final bids in late November, with completion scheduled for early in the new year.

Baqar Hussain

A Wannabe CFO, just had stepped in the corporate sector, willing to explore every aspect here and learn as mush as i can, awareness for those who dont, get the info where ever possible and stay up to date always.

The Canadian Securities Institute


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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)