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October 31, 2014

Spain forced to postpone Aena IPO

It seems that the dark cloud of an uncertain European economy hangs heavily over the Spanish skyline as news broke that the anticipated Aena IPO has been postponed, seemingly indefinitely. Aside from an uncertain economy, a lack of interest from the market for new listings set the seal on the likely failure of this IPA. It is, of course, a massive blow for Spain whose individual economy has suffered more than many, and places the Spanish Government in a very awkward position. This would have provided some very useful PR for them with a forthcoming election approaching next year, instead of another ‘debacle’. Even this week the government were making reassuring noises that recent problems with the IPO would all be resolved prior to launch.
The ‘excuse’ given for the postponement of the IPO was, according to an unnamed source, as a result of a recently identified flaw which had to be resolved. The source also confirmed that the ‘flaw’ related to a tender not having been organized to choose an auditor to sign off the comfort letter needed for the prospectus. A second unnamed source also confirmed that a tender would still be held in order to choose an auditor. In truth, all is not lost for the Spanish Government as they still have a period of six months to achieve something before legal time restrictions mean everything will have to start from scratch again. With Aena owning 46 airports in Spain and having financial interests in airports in Mexico, Colombia, Cuba, Angola and the UK, it is not an unattractive investment prospect.
The Spanish Government has already managed to provisionally place 21 percent of the airport operator with three investors – Spain’s Corporación Financiera Alba fund, British fund TCI, and infrastructure group Ferrovial, but at a price which seemed to contradict market opinion and which made the investment look less attractive than had been anticipated. The Spanish government had originally considered a EUR€5 billion (USD$6.3 billion) valuation for Aena, however the price these three shareholders offered to buy into the airports operator valued it at between EUR€7.3 billion and EUR€8 billion. However, a public body which has been recently advising the government on privatisations predicted a preliminary price range implying an equity value of between EUR€6.2 billion and EUR€8 billion. These three investors are now tied in to following through with their intended investment if the sale of Aena is completed by the 16th April 2015.

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