Canadian investment firm to take 49.9% stake in airport operator Skyport
Nearly half the shares in Skyport, the company that runs LF Wade International Airport, are to be sold by the Canadian-based giant Aecon to an investment company.
The move will not result in operational, management or staff changes at the airport, according to a statement issued yesterday afternoon.
Aecon’s agreement to sell a minority stake in Skyport to Connor, Clark & Lunn Infrastructure, an investment asset management firm based in Toronto, is expected to close in the second quarter of 2023.
The deal, reported as being worth $128.5 million, was described by CC&L as an endorsement of Bermuda as a jurisdiction for investment.
"It is disappointing that Bermuda's elected Government and Bermuda's taxpayers have to sit idly by while foreign companies sell our airport for their own profit.
“During Covid, the taxpayers of Bermuda had to write cheques to Skyport amounting to $50 million in minimum revenue guarantees because of the OBA's terrible no-bid deal. The fact that taxpayers were required to pay to protect Skyport's valuations was bad enough, but today the news gets much worse for Bermudians.
“At a time when Bermudians are challenged to make ends meet, at a time when the Government is doing all it can to reduce taxes for workers to cope with global inflation, and at a time when the Government is working so hard to balance Bermuda's budget, today's news will anger many.
“In 2017 Aecon invested only $65 million of equity into the no-bid privatisation of Bermuda's airport. Today, with this sale, the value of that equity is now $257 million, an increase of $192 million — which should shock every taxpayer. Aecon's investment is four times what it was worth just six years ago, while taxpayers were obligated to give Skyport $50 million in revenue guarantees.
“The Government was informed by e-mail at 3.59pm of this sale of equity by Skyport. Many Bermudians, including the Cabinet, learnt about it from the international press. Sadly, due to the bad deal passed by the former Government that was opposed by a majority of the voters in Bermuda, the elected Government sits on the sidelines while foreign companies profit at the expense of Bermuda's taxpayers.
“This is why we in the PLP worked so hard to get a fairer deal for Bermuda when we were in Opposition. This is why Bermudians from all walks of life protested this privatisation and were tragically subjected to pepper spray as the OBA was determined to approve this terrible deal.
“And today, while Bermuda's taxpayers are still paying Skyport's energy bills, still paying minimum revenue guarantees to Skyport, and the Government had to spend $4 million of extra funds for firefighters to keep Bermuda's airport open with no assistance from Skyport, Aecon is laughing all the way to the bank.
“This is why elections and issues matter. I would ask every taxpayer to think what could have happened if the PLP prevailed with our plea many years ago and Bermudians were the investors in our own airport rather than a foreign company that received a 30-year no-bid contract, who today has quadrupled their investment in just six years.
“If we had prevailed, those extraordinary returns could have benefited Bermuda's taxpayers — benefiting our economy. Sadly, the only thing the taxpayers will get from today's sale is a bill on March 31 from Skyport demanding their next minimum revenue guarantee payment."
Under the arrangement, Aecon Concessions will retain the management contract for the airport.
Aecon will also keep its place as the controlling shareholder of Skyport, owning a 50.1 per cent interest.
CC&L Infrastructure stands to acquire a 49.9 per cent minority interest in Skyport — the Bermudian company responsible for the airport’s development, financing, operations, maintenance and commercial functions.
Bermuda Skyport Corporation Limited, which officially took over airport operations in March 2017 — a month before work on the new terminal broke ground — said the transaction would be subject to customary closing conditions.
The Canadian firm describes itself as “an experienced owner and active manager of infrastructure assets”.
Based in Toronto, CC&L Infrastructure’s website says its decades of experience enable it to “optimise assets and generate attractive, long-term returns”.
The firm and its affiliates have stakes internationally in infrastructure projects ranging from renewable energy to transportation.
The 40-year-old company has become one of Canada’s largest privately owned asset management firms, with oversight of billions’ worth of assets.
“We target traditional and energy infrastructure projects with highly attractive risk-return characteristics, long lives and the potential to generate stable cashflow.”
Matt O’Brien, the president of CC&L, said the deal marked a chance to “expand to a new sector and geography”.
“This investment is consistent with our strategy of investing in high-quality, long-duration assets in creditworthy jurisdictions.”
Mr O’Brien said LF Wade International Airport was “an excellent example of a resilient, durable asset with potential for growth as passenger traffic recovers in the wake of Covid-19 — providing an attractive complement to our existing, well-diversified portfolio of infrastructure assets”.
Bermuda’s new terminal was on track to open in the summer of 2020, but its finish line came right after the outbreak of a global pandemic shut down travel to Bermuda.
CC&L’s managing director, Ryan Lapointe, said the company believed Bermuda was “a strong jurisdiction for investment”.
“As a long-term investor, we look forward to working with our partners at Aecon and the Government of Bermuda in the continued successful operation of the Bermuda International Airport for many years to come.”
Steve Nackan, the chairman of Skyport, said the deal marked “a vote of confidence in Bermuda — the future of Bermuda’s economy, post-pandemic recovery and growth in tourism”.
He added: “We are pleased to have come to an agreement with CC&L Infrastructure, who we believe will be an excellent fit as a financial partner in Skyport and will lend support to the many strategic initiatives to further enhance the growth and success of the airport.”
Skyport president Aaron Adderley said the company looked forward to working with CC&L to build on “the excellent partnership we have developed with Aecon”.
“As an organisation, we have benefited from working with an experienced airport concessionaire and are pleased to expand on that.”
Aecon built Bermuda’s new airport under a public-private partnership — with more than $425 million of private capital investment said to have been made so far in the Airport Redevelopment Project.
Mr Nackan said Aecon “remains committed to Bermuda and Skyport”.
• To read the Skyport statement in full, click on the PDF under “Related Media”
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