2 Feb 2009

Infratil revises agreement on German airport

1:35 pm on 2 February 2009

Infratil has reached an agreement with the City of Luebeck to delay an arrangement that allows the utilities investor to force the German city to buy its 90% stake in Luebeck Airport.

The Wellington-based firm paid $23 million for its stake in the loss-making airport in 2005, with the north German city holding the remaining 10%.

It has been disappointed by patronage at the airport, with 540,000 people passing through its gates, well below the 1.2 million set out under the contract signed with the City of Luebeck.

Infratil executive Paul Ridley-Smith said a planning decision due in the first quarter is crucial, as unless it is favourable, airlines will not base aircraft at the site, making it difficult to achieve passenger growth.

Under the new agreement Infratil has reached with the City of Luebeck, it will not exercise its right until late October 2009.

In what Mr Ridley-Smith says a win-win for the utilities investor, Infratil has finalised the price it will get if it exits the arrangement at $59 million, plus capped compensation for any operating losses during this year.