Three foreign groups have interest in Viracopos, says secretary of Aviation

Three foreign groups have interest in Viracopos, says secretary of Aviation

The most advanced proposal comes from a joint venture based in Turkey that was formed to assess infrastructure assets in Brazil — where it doesn’t operate yet. This joint venture is comprised of a pool of companies, including a European airport operator, a logistics company and a fund, and initially is interested in UTC’s stake in the airport. Yet it doesn’t rule out making an offer for Triunfo Participações and Investimentos’ stake in the asset.

ogether, UTC and TPI hold 51% in the concession of Viracopos, with the other 49% held by state-owned Infraero. The joint venture is working to make a firm offer. It has already conducted a preliminary diligence and defined a proper due diligence.

There is also a Singapore group interested in the private-sector stake in the airport. And a third proposal made to the concessionaire’s creditors — Brazilian Development Bank (BNDES), Banco do Brasil, Bradesco and Itaú. This proposal is led by investment firm IG4 Capital and includes a change of control and capital injection of $100 million. American private-equity firm Cerberus would be in the deal. It would adopt the same engineering that IG4 Capital used, in partnership with banks, when it acquired sanitation company CAB Ambiental from construction group Galvão.

UTC and TPI would be diluted and their stakes converted into shares in a fund to be created. The rights of UTC and TPI’s remaining shares in this fund would be transferred to the creditors. IG4 would bring Dutch airport group Schiphol to manage Viracopos. The idea is that Infraero would participate in the capital increase.

Any of these possibilities would mean a twist to the decision of the Viracopos shareholders, which because of their financial difficulties and frustration with the airport’s prospects approved in 2017 to initiate rebidding proceedings, essentially giving the concession back to the government. The mechanism is provided for in Law 13,448, but still needs to be regulated by a decree. The rebidding only becomes irreversible with the signing of an addendum that depends on the decree.

UTC, which is under bankruptcy reorganization, maintains its stake in Viracopos for sale in its court-approved plan. And TPI, in out-of-court reorganization, doesn’t rule out an alternative to the rebidding. In a recent meeting with investors and analysts, the company made clear “new scenarios” could emerge and make it give up returning the asset to the government.

Valor has learned that any alternative, however, requires renegotiating the concession contract of Viracopos, which is unbalanced. What most complicates the operation is a radical change in how cargo-storage fees are charged. Days after the concession contract’s signature, the fee fell to R$0.08 from R$0.50 per kilogram. This led the consortium to lose revenue in a vital activity without immediate compensation. Only in late 2016 it got a contract adjustment, but partial.

The government reckons it would be very difficult to obtain in a potential rebidding a fixed concession fee close to what was obtained in 2012. The consortium won the airport by bidding R$3.8 billion for 30 years, a 160% premium over the minimum price. Moreover, the rebidding may take time to be concluded. National Civil Aviation Secretary Dario Rais Lopes has been saying the government prefers a market solution to the rebidding. “As long as it has a strong indication of maintaining the current levels of service offered to clients,” he said.

Viracopos was chosen the best airport in Brazil in a passenger-satisfaction survey conducted by the Civil Aviation Secretariat (SAC). “Viracopos is certainly the country’s most important asset in logistics. It is probably one of the most important in Latin America. It has been very well-managed by the concessionaire, so much that it was elected the second best cargo airport in the world,” one interested party said.

For creditors, including BNDES, what has come officially so far were three proposals: the exit of UTC; the continuity of TPI with a capital increase; and the arrival of a new partner, which would be IG4’s way.

One creditor said IG4’s proposal would demand an effort to grant a longer grace period and a significant debt cut. BNDES says it is unaware of any potential interest among the Turkish and Singaporean investors.

The concessionaire is on time in its payments to BNDES, to which it owes approximately R$2 billion, among financing contract and a bond of about R$500 million that BNDESPar, the bank’s investment arm, subscribed. In the financing contract, most is direct exposure of BNDES, but there are also on-lending via financial agents, which take the risk of the operation.

People close to the negotiations say that BNDES is aware that the Viracopos project is unbalanced economically and has fixed concession payments to make that would significantly eat into its cash flow. The situation becomes more complex considering that UTC and TPI are in court-supervised and out-of-court reorganizations, respectively.

TPI signaled to the government it could make a capital injection in the concessionaire with the proceeds of the sale of port terminal Portonave. But as long as the government admitted the contract imbalances, in order to compensate the amount owed by about 50%. This proposal, however, doesn’t provide a solution to the creditor. In this case the bonds subscribed by BNDESPar would become convertible into equity and BNDES would relinquish getting that as debt.

TPI doesn’t acknowledge IG4’s proposal and vice-versa. UTC confirmed it has been holding talks with interested groups, but said there was no firm offer. TPI declined to comment.

For: Valor Internacional

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