Transactions - MARCH 28, 2017

Fraport Greece signs €1b loan agreement

by Released 3/28/17

A consortium of leading financial institutions has signed a long-term financing of approximately €1 billion ($1.08 billion) with Fraport Greece for the 40-year concession of 14 Greek regional airports.

Fraport Greece, a joint venture of Fraport AG Frankfurt Airport Services Worldwide and Copelouzos Group, is paying a total of €1.234 billion ($1.33 billion) for the concession to the Hellenic Republic Asset Development Fund. This constitutes the biggest concession fee ever paid in the history of the Hellenic Republic. Through this investment, the two shareholders have demonstrated their willingness to support the country’s efforts to achieve recovery as well as their trust in Greece’s potential.

The consortium of lenders includes Alpha Bank, lending €284.7 million ($307.9 million); Black Sea Trade and Development Bank, lending €62.5 million ($67.6 million); the European Bank for Reconstruction and Development, lending €186.7 million ($201.9 million); the European Investment Bank, lending €280.4 million ($303.2 million): and the International Finance Corp., a member of the World Bank Group, lending €154.1 million ($166.6 million). IFC also is the sole provider of euro-denominated interest rate hedging swaps to help Fraport Greece hedge potential fluctuations in interest rates through the term of the loan. Some €280.4 million ($303.2 million) of the total loan will be used for the financing of development works at the 14 airports, while €688 million ($745 million) will be used as part of the upfront concession payment.

Fraport Greece recently announced a capital increase raising the company’s total capital amounts at €650 million ($703 million).

The agreement also includes the modernization and upgrading of airport infrastructure. Fraport Greece will invest at least €400 million ($433 million) during the first four years in construction works for the development of the airports that will support the development of the tourism industry, a key driver of the Greek economy. During the period of the entire concession, infrastructure investments are expected to exceed €1.4 billion ($1.5 billion).

The 14 airports included in the concession are Aktion, Chania (Crete), Kavala, Kefalonia, Kerkyra (Corfu), Kos, Mitilini, Mykonos, Rhodes, Samos, Santorini, Skiathos, Thessaloniki and Zakynthos. Combined, these airports served a total of about 25.2 million passengers in 2016.

Fraport AG is one of the leading companies in the international airport business active on four continents through investments and subsidiaries. At Frankfurt Airport, its home base, the company operates one of the world’s most important air transportation hubs. In total, Fraport employs around 21,000 people worldwide.

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