Meinl Airports International Ltd.
Meinl Airports International develops low cost airport for Warsaw
St, Helier Jersey (euro adhoc) -
Transformation of a former military airport 40km west of Warsaw
Total investment volume EUR 210 million start of operation planned for 2011 Analyses forecast more than 2 million passengers in 2012 for Sochaczew
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merger, acquisition and takeover/development
Jersey, 5th February, 2008. Meinl Airports International Ltd. (MAI) will develop an airport for the metropolis Warsaw and the Warsaw region. The new airport at Sochaczew, 40km west of Warsaw will concentrate preliminary on low cost carrier service. The total investment volume for the development of the airport amounts to approximately EUR 210 million, with the first flights planned to take off by 2011. The airport harbors a significant growth potential, as a considerable increase in the flight volume is expected for Warsaw and the existing "Warsaw Okecie Airport" will reach its capacity limits within the coming years. Experts expect that by the year 2012 an annual passenger volume of more than 2 million will be handled at Sochaczew.
MAI prevails over international competitors in public tender and acquires a 40% stake in airport company - expected IRR 17%.
In the past months, MAI has prevailed over international competitors in a multi-stage call for tenders and was awarded the contract to transform and develop the former military airport at Sochaczew into an international commercial airport.
Initially MAI will acquire a stake of 40% in the new airport company, with the remaining shares held by the state and a private Polish owner. It is intended that MAI will, during the development process, increase its stake as it becomes permissible in Poland, which is limited to 49% at the moment. As a first step, MAI will provide the required equity to finalize the project concept, and the local partners will in turn bring the land plots into the airport company. The total investment volume for the development of the airport and its infrastructure is expected to amount to approximately EUR 210 million. The project shall be financed with a debt ratio of at least 50%, thus increasing the return of the shareholders on the capital employed. The definite financing structure will be fixed at the start of construction in 2009 at the latest. Based on the current plans, MAI´s equity investment in the project will amount to approx. EUR 50 million, whereof the bulk has to be paid stepwise after the ground breaking.
The expected return on equity for the project amounts to 17%.
Low cost airport for Warsaw - concept follows other successful low cost airports
MAI´s partner in the tendering process was the operating company of the airport Cologne-Bonn, which will also act as a consultant for the development of the Polish airport. There are, however, no plans for the German airport to acquire a financial stake in the project.
The Cologne-Bonn airport has substantial experience in developing a successful low cost carrier concept: since Germanwings, headquartered at Cologne airport, started its operation 6 years ago, the former regional airport managed to increase its passenger volume from 5.4 million passengers in 2002 to 10.5 million passengers in 2007. Other European airports that focus on handling low cost and charter flights or have become alternative airports for these segments, have also shown a highly dynamic development, airports such as Stansted or the German airport Frankfurt-Hahn, whose background is very similar to Sochaczew: In the mid-nineties a former military airport was successfully transformed into a commercial airport focusing on handling low cost flights. Frankfurt-Hahn now handles an annual passenger volume of approximately 4 million.
Attractive growth potential based on dynamic passenger volume increase in the Warsaw region
The airport´s potential results from the dynamic growth of air traffic in Poland as a whole and the Warsaw region in particular. Over the past 10 years, the passenger volume at Warsaw airport has increased from approximately 3.1 million in 1996 to 8.4 million at present. This corresponds to an annual increase of more than 10%, and is expected to continue. Based on forecasts of the Polish Civil Aviation Authority (CAA) the annual passenger volume in Warsaw or the Warsaw region will exceed 15 million passengers by 2015.
The location of Sochaczew and its available infrastructure, plus the expected passenger volume growth in the region, provides Sochaczew with all possibilities to establish itself as a second airport in addition to the main airport of Warsaw-Okecie.
Start of operation 2011 - more than 1 million passengers expected per year
The contracts were signed this week, and in the weeks to come MAI and its local partners will finalize the development concept for the airport. The new airport at Sochaczew shall be established primarily as airport for low cost flights and is intended to relieve the existing Warsaw airport in this segment. As Roman Himmler, Chairman of Meinl Airport Managers, puts it, "We do not consider ourselves as competitors for "Okecie", much rather the new airport aims at optimally complementing Okecie."
And he goes on to say, "Based on the final development concept, MAI plans to get the necessary approvals and permits for realizing the concept by the end of 2008, so that the first sod can be turned and construction can start by 2009. After a construction time of about 2 years and a subsequent test phase required worldwide for getting the final operating license for airports, the new airport is expected to handle the first passengers in 2011."
Based on a market and project study, Sochaczew is expected to handle more than 1 million passengers one year after start of operation. Within 5 years after start of operation, 3 million to 4 million passengers will be handled per year, and in the long term, annual passenger volumes are expected to approach the two-digit million range.
First international airport with international participation planned in Poland
The planned new airport for Warsaw is the first MAI project in Poland and hence an important step for the further development of the company in this attractive investment market. "The new Sochaczew Airport is also the first greenfield project that we develop `from scratch´. That way, the project is an essential milestone for the successful future development of MAI in general", said Mr. Himmler and he added, "In addition, Sochaczew is the first international airport with international participation planned in Poland."
end of announcement euro adhoc
Further inquiry note:
Meinl Airport Managers Ltd.
Nadine Gilles
Member of the Board
+421 911 500 730
gilles@meinlairports.com
Branche: Real Estate
ISIN: AT0000A053N4
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Börsen: Wiener Börse AG / Third Market