Done Deal: The State Becomes Majority Owner of Budapest Airport

After almost 20 years, the Liszt Ferenc International Airport is back in majority state ownership. Following more than a year of intensive negotiations, the sale and purchase agreement of Budapest Airport Ltd. was signed on June 6, 2024, the Ministry for National Economy announced.

The repurchase of Budapest Airport Ltd. is the most complex and largest economic transaction of the post-communist period (since 1989), the ministry said in the statement. Negotiations between Corvinus International Investment Ltd. and VINCI Airports took place in two rounds. The deal was concluded with an international group of vendors, including AviAlliance (German airport operator), GIC (Singaporean sovereign wealth fund), and CDPQ (Canadian pension fund). An agreement was also reached with the international group of creditors financing the airport to finalize the transaction.

The speed with which the airport was bought back is exceptional, as it is not uncommon for a deal of this size to take many years anywhere in the world, the statement reads. The sale transaction is also a record size by Central European standards. In proportion to the purchase price,

the Hungarian State acquired an 80% stake in Budapest Airport Ltd. and the French co-investor VINCI a 20% stake. The purchase price is EUR 3.1 billion,

and the successful agreement with the consortium of lenders has extended the EUR 1.44 billion loan taken out by the previous owners.

Since the beginning of September 2023, it has been known that the government made a takeover bid for a majority stake in Budapest Airport Ltd. In addition, Minister for National Economy Márton Nagy also told Bloomberg at the end of 2023, that if the deal goes through, the expansion of the airport will be on the agenda and there are plans to build a third terminal.

In October last year, the ministry made changes to the aviation law, preparing the ground for the takeover of the company. The state also sold a number of assets in order to secure the buy-back. In the recent period, Corvinus International Investment Ltd., which is 100% owned by the Hungarian State, successfully sold its stakes in Erste Bank Hungary Ltd. and Yettel Hungary, as well as the majority of its stakes in domestic VIG companies (the state reduced its 45% stake to 10%).

In total, the three transactions generated revenues of more than EUR 700 million for the state, which it used to finance the buy-back of Budapest airport. The remainder of the purchase price was financed by Corvinus International Investment Ltd. through a development loan from Eximbank and a capital increase by the budget.

The future objectives and business plan for the airport will be presented by the Ministry for National Economy, which will have the ownership rights, and VINCI at a joint press conference in early July.

Via Kormany.hu, Featured image: Facebook/Budapest Airport