Austerity Leads To Privatisations: VINCI To Benefit


In order to free up resources to fund economic sectors in need, the French government has started to implement a policy of selective asset sales from which VINCI Group could greatly benefit. This time, the government has sold a stake in Aeroports de Paris (ADP), the operator of Charles de Gaulle airport in Paris which is Europe's second largest airport after Heathrow.

VINCI has acquired 4.7% of the capital of ADP which is equivalent to around 4.6mn shares for a total investment of EUR364.6mn. By reducing its share in ADP, the French government is attempting to rebalance its shareholding and use the funds to boost the stagnant economy. This move follows the disposal of a EUR707mn stake in European Aeronautic, Defence and Space Co. (EADS) in April 2013.

The airport sector is not new to VINCI as the company recently acquired Portugal's ANA, the national airport operator and owner of Lisbon airport. In addition, VINCI has expressed an interest in Brazilian public-private partnerships (PPPs) for airports and it is planning to submit proposals for the Galeão, in Rio de Janeiro city, and Confins, near Belo Horizonte, airports. Tenders are expected to be announced in August 2013 for these two concessions which amount to more than US$5.52bn.

In addition, VINCI already holds a 3.3% stake in ADP. The successful acquisition gives VINCI a seat on the board, making it a strong contender should the airport be fully privatised in the future. This is in line with the company's strategy to strengthen the concessions side of its business which contributed EUR5.3bn in 2012, representing only 14% of the company's total revenue.

Confidence Returns
Vinci's Share Price
Improving performance on VINCI's share price indicates that the market has responded well to the company's strategy to diversify both markets and sectors of operationas the French infrastructure market will remain weak in 2013 and 2014.
This article is tagged to:
Sector: Infrastructure
Geography: France

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