A unit of Singapore’s Changi Airport
Group and Odebrecht SA will acquire Galeao airport in Rio de
Janeiro for almost four times the minimum bid to run Brazil’s
second-busiest air hub for 25 years.
Changi Airports International and the Brazilian
construction and engineering company offered to pay 19 billion
reais ($8.3 billion) for Galeao, which will host visitors for
the soccer World Cup next year and the 2016 Olympic Games. This
compares with the minimum required bid of 4.83 billion reais.
The contract is expected to be signed in March, Changi said in
an e-mailed statement yesterday.
The airport auction was part of President Dilma Rousseff’s
212 billion-reais plan to modernize infrastructure and shore up
investor confidence as growth in Latin America’s largest economy
slows. The government is under pressure to complete the projects
as the country prepares to welcome a projected 600,000
international visitors for the World Cup in June.
“It’s going to be an incremental process, but this is
going in the right direction for Brazil,” said Jefferson Finch,
an analyst from political risk consultancy Eurasia Group. “If
they can follow this up with three successful highway auctions,
it could really be very helpful in turning the boat of sentiment
away from negative to more positive.”
The real rose as the premium on Galeao airport boosted
speculation more dollars will flow into Brazil, according to
Pablo Spyer, a director at Mirae Asset Management in Sao Paulo.
The currency advanced 1.1 percent to 2.2794 against the dollar
on Nov. 22.
Galeao Expansion
“Those pessimistic about Brazil will have a bitter day
today,” Rousseff said Nov. 22 in a speech in the northeastern
city of Fortaleza. The airport auction “didn’t go wrong.”
The first phase of the airfield’s expansion will include
building an additional 26 airbridges and parking lots by April
2016, according to Changi’s statement. The airport will be able
to handle more than 60 million passengers annually by the end of
the concession period, it said.
“The Latin American aviation market presents many growth
opportunities,” Lee Seow Hiang, chief executive officer of
Singapore’s Changi Airport Group, said in the statement. “We
must focus immediately on the expansion of the Galeao airport.”
Three Airports
Singapore’s air transport system is ranked first for
quality in the World Economic Forum’s latest Global
Competitiveness Report, based on a survey of more than 13,000
business leaders. Brazil’s system, by contrast, ranks 123rd on
the list of 148 countries.
Last year, Brazil sold licenses for three airports,
including Brasilia and Sao Paulo’s Guarulhos, for a total of
24.5 billion reais. Afterward, the government was criticized for
setting terms that failed to draw the world’s biggest airport
operators, so the terms were redrawn for the auction.
“I don’t think Odebrecht tore up money with their bid,
that’s not for us to say, considering what we bid on Guarulhos
last year,” said Antonio Carlos Mata Pires, vice president of
OAS Investimentos SA, in an interview at the auction. OAS is an
investor in Invepar, which led the group that won Guarulhos last
year with a 16.2 billion-real bid, almost five times the
minimum.
Confins Airport
The Aerobrasil group led by CCR SA (CCRO3), including the operators
of Munich’s and Zurich’s airports, also won the right to operate
the Confins airport in Belo Horizonte for 30 years at the Nov.
22 auction. The group offered 1.82 billion reais versus a
minimum bid of 1.1 billion reais. CCR shares closed 1.3 percent
higher on Nov. 22.
Brazil’s state-run management company Infraero will retain
a 49 percent stake in the airports, and the winning bidders will
contribute 5 percent of annual revenue to support the country’s
other airports.
Five groups submitted bidding documents on Nov. 18. Brazil
required bidders for Galeao to have experience managing airports
that handle 22 million passengers a year, and for Confins 12
million passengers.
Galeao handled more than 17 million passengers in 2012,
according to the civil aviation agency, known as Anac. Confins
is the fifth-busiest Brazilian airport, handling more than 10
million last year.
Three Highways
The government will auction three highways before year-end,
Finance Minister Guido Mantega told reporters Nov. 22 in
Brasilia.
Earlier this year, the government had to boost the rate of
return for road projects after an initial offer didn’t generate
interest. Still, one of two roads auctioned in September drew no
bids.
Rousseff’s infrastructure drive has suffered a series of
delays and revisions. The government has not yet auctioned any
railway or port concessions, which it originally pledged to do
this year.
Brazil’s economy grew 2.7 percent in 2011 and 0.9 percent
in 2012. Analysts surveyed by the central bank forecast 2.5
percent expansion this year and 2.1 percent next year.
The real climbed 1.5 percent in the five days through Nov.
22, its first weekly rally since the period to Oct. 18 and more
than all major currencies tracked by Bloomberg. That follows a
10 percent weakening this year amid speculation the country may
be downgraded by Standard Poor’s, which in June placed
Brazil’s rating on negative outlook, citing weak growth.
To contact the reporters on this story:
David Biller in Rio de Janeiro at
dbiller1@bloomberg.net;
Christiana Sciaudone in Sao Paulo at
csciaudone@bloomberg.net;
Taís Fuoco in Sao Paulo at
tfuoco1@bloomberg.net
To contact the editors responsible for this story:
Stanley James at
sjames8@bloomberg.net;
Andre Soliani at
asoliani@bloomberg.net
Singapore Changi, Odebrecht to Acquire Rio Airport
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