Abu Dhabi-led grouping eyes Jordan project exit
Abu Dhabi, January 28, 2013
An Abu Dhabi-led consortium investing $850 million to expand Jordan's main airport is looking to exit a 25-year concession to manage the facility, preferring to cash in the investment rather than stay involved for coming years.
Three banking sources told Reuters Airport International Group (AIG), formed of French, Greek and Jordanian firms to expand the Queen Alia International Airport with an additional terminal, had approached banks to advise on the possible sale.
The consortium was awarded a 25-year build-operate-transfer (BoT) concession by the Jordanian government in 2007. The new terminal is expected to open in February, increasing capacity nearly three times to 9 million passengers a year.
"They (the consortium members) have finished almost all the work and as financial investors, are looking to get out of the investment. The process is still at an initial stage and it will be a while before any deal is reached," one of the sources said.
Yet the potential withdrawal of an Abu Dhabi-led consortium is likely to be a sensitive development given the UAE's support for Jordan, a monarchy which is grappling with dwindling foreign investment in its ailing economy, amid the Arab Spring unrest.
Arab uprisings have hit Jordan's domestic demand and foreign cash flows, including remittances from expatriates in the Gulf, but air passenger traffic in the country has increased amid unrest in neighbouring Syria.
Queen Alia airport, the main hub for Royal Jordan Airlines, already has three terminals and more than 90 per cent of work expanding it is complete, the sources said, speaking on condition of anonymity as the matter is not public.
The AIG consortium is led by Abu Dhabi-owned Invest AD, which has a 38 per cent stake, and Kuwait's Noor Financial Investment Company, with a 24 per cent ownership.
LOOKING TO EXIT
Other partners include Jordan's Edgo Group, Greek construction firm JP Avax, J&P Overseas and a unit of France's Aeroports de Paris Group.
A spokeswoman for AIG declined comment. Invest AD, Noor Financial and Edgo Group were not available for comment. ADP, which has a 9.5 per cent stake in the venture, declined comment.
Invest AD's role in the venture is part of its infrastructure business, which it operated as a joint venture with Swiss lender UBS, a second source said. The venture was scrapped in 2010 and the firm has been looking to exit, the source added.
A new buyer will be taking charge of a much larger airport with increased traffic after the expansion.
"It's not a massive airport now but after the expansion, you are talking about a sizeable one. Traffic is only likely to increase further given issues in countries like Syria," the source said.
Potential buyers could range from regional sovereign wealth funds that have a heavy focus on infrastructure, as well as global infrastructure investors. Saudi Arabia, which has proposed inviting Morocco and Jordan into a so-called club of kings with Gulf monarchies, might also lend its support.
Invest AD is owned by Abu Dhabi Investment Council (Adic), which focuses on countries closer to home and is a separate entity from Abu Dhabi Investment Authority (Adia), one of the world's largest sovereign wealth funds.
Noor is the financial arm of Kuwait's National Industries Group, controlled by the high-profile Kharafi family. - Reuters
More Travel, Tourism & Hospitality Stories
- Etihad in move to clear flights backlog
- Tourism industry emerges from downturn
- Airbus orders more frequent A380 checks
- Dubai Mall stand offers air safety tips
- Elaf Group plans new hotel in Makkah
- UPDATE: Abu Dhabi airport starts operation
- Qatar Airways mulls options on 3 extra A380s
- RAK features 9 travel firms at ITB Berlin
- Etihad names Patrick Vieira guest ambassador
- Lufthansa to offer Premium Economy Class
- Ras Al Khaimah TDA appoints new CEO
- Abu Dhabi flights hit by 'technical failure'
- Egypt urges Germany to ease travel advisory
- Qatar Airways to get 3 A380s in June
- Paramount eyes expansion in region
- All EU citizens exempt from pre-entry UAE visas
- Sofitel to open in Downtown Dubai
- Women’s role in aviation focus for summit
- Turkish, Singapore Airlines expand codeshare
- Global air passenger traffic up 7.8pc in Jan
- Hilton to open 41-storey hotel in Pearl-Qatar
- Graffiti area at the Great Wall
- Dubai hotels welcome 11m guests
- Wyndham signs for 4th hotel in Turkey
- Mideast carriers top global air freight growth
- IFA Hotels unveils fresh brand identity
- Turkish Airlines launches Rotterdam flights
- RJ to operate Amman-Kuwait twice daily
- JCDecaux unveils digital screens at Dubai airport
- EU awaits surge in UAE corporate travellers