Aerostar Airport Holdings lands LMM P3 contract
Exactly one week after receiving proposals from the last two remaining consortiums vying to take over the management of the Luis Muñoz Marín International Airport, Gov. Luis Fortuño announced today the government has chosen Aerostar Airport Holdings for the job.
The chosen bidders beat out Spain’s Grupo Aeropuertos for the 40-year public-private partnership contract to run Puerto Rico’s main airport facility. The winning consortium is composed by Mexico’s Grupo Aeroportuario del Sureste and Highstar Capital.
The Puerto Rico government estimates it will receive some $2.6 billion in revenue and other benefits from the P3 transaction over the term of the lease.
“Today, we’re one step closer to having the international airport we deserve, one that is more modern, more comfortable, with better services, that creates more jobs and that brings more tourists to the island,” said Fortuño during a news conference at the airport.
Pursuant to the terms of its bid, Aerostar Airport Holdings will make an upfront payment of approximately $615 million to the Puerto Rico Ports Authority. This payment is expected to be funded by a combination of financing and equity contributions on a 50-50 basis from each of ASUR and Highstar Capital IV.
Credit Suisse Securities (USA) LLC served as financial advisor and Mayer Brown LLP and Pietrantoni Méndez & Alvarez LLC served as legal counsel to the P3 Authority.
ASUR intends to transform LMM into a world-class airport through a capital investment program of more than $1.4 billion during the term of the lease, while working with the airport community and airlines to better serve passengers.
“We know this is a great challenge that will imply investment and teamwork, but we’re done it,” said Adolfo Castro-Rivas, CEO of Grupo ASUR. “Twelve years ago we took over nine airports in Mexico and we know that the only way to meet that challenge is to work as a team. One of our main goals is to create an airport community that works together to provide better service to the passenger, who deserves it.”
ASUR also expects that its management of the LMM Airport will help facilitate economic growth in Puerto Rico and make it a top choice for tourists travelling to the Caribbean region.
Grupo ASUR manages nine airports in the Mexico’s southeast region through a P3 agreement with the government, including the busy Cancún hub and facilities in Mérida, Cozumel, Villahermosa, Tapachula, Huatulco, Oaxaca, Minatitlán and Veracruz. The publicly traded company serves between 15 million and 17 million passengers per year.
The consortium’s cash offer will go toward paying down or paying off the Puerto Rico Ports Authority’s $925 million in total debt, $400 million of which is attributed to the airport’s burgeoning operational expenses.
It was just a week ago when the Puerto Rico P3 Authority confirmed it had received the final proposals from the two consortiums, predicting it would take about two or three weeks to review their offers.
However, it was apparent that the government agency in charge of brokering the management agreement already had a clear idea of what each competitor was proposing.
This is the second P3 agreement the Fortuño administration has signed in the past year. In late June 2011, the government selected Autopistas Metropolitanas de Puerto Rico to take over the management, maintenance and operation of the PR-22 and PR-5 toll roads.
Metropistas, as the consortium composed by Goldman Sachs Infrastructure Partners II, L.P. and Abertis Infraestructuras is known, committed to putting up $1.4 billion over the life of the 40-year highway P3 agreement.