Canadian teachers swoop in for London City Airport
A consortium led by Ontario Teachers' Pension Plan Board and Borealis Infrastructure is reported to have agreed a deal to buy London City Airport from its US owners.
The airport, owned by Global Infrastructure Partners, could fetch more than £2bn (€2.5bn). China's HNA Group, the ultimate parent of Irish aircraft leasing giant Avolon, and Cheung Kong Infrastructure Holdings were also in the mix buy the property which links markets including Dublin to London's main financial centres in the City and Canary Wharf.
City Airport opened in 1987 and initially struggled. It was bought by Irish businessman Dermot Desmond for £23.5m in 1995 from builders Mowlem. In 2006 the current sellers along with American International Group (AIG) bought the airport from Mr Desmond for a reported £750m. AIG later sold its stake to GIP and Highstar Capital, which now owns 25pc.
The winning bidder will have to come to terms with a political conflict that stands in the way of a planned expansion that would help City serve 6.5 million passengers a year by 2023. London Mayor Boris Johnson vetoed the £250m plan to add aircraft stands, an arrivals terminal and taxiway last year.
In 2014 3.6 million passengers used the airport, but airlines have also warned that any price hikes by a new owner could see them pull out.
Ontario Teachers' Pension Plan paid €405m in 2014 for a 20-year licence to run the Irish National Lottery. Spokesmen for GIP, PSP and Borealis declined to comment. Representatives for Ontario Teachers' and CKI didn't immediately respond to requests for comment, while a media representative for HNA said she couldn't immediately comment.