Athens Airport Concession Deal Stalled

Athens International Airport SA (AIA) is reportedly being fined with 330,000 euros a day starting January 1, for the delay in signing and ratifying the 20-year extension of its concession agreement, approved late last year by the European Commission. 

In a letter, which media reports say was sent last week to the finance ministry and to TAIPED, the Greek privatization fund, AIA is calling on the authorities to set a specific timeframe for the completion of the transaction. 

AIA SA paid a total of 1.1 billion euros for the 20-year extension of the Athens airport concession to 2046.

However, despite having received the approval of all relevant authorities, the delay in the final actions required for the finalization of the transaction has raised concerns. In order for the transaction to be completed it must be approved in parliament, initially scheduled to take place by the end of 2018, said AIA CEO Yiannis Paraschis in the letter, adding that the delay is impacting the company and calling on the ministry and TAIPED to immediately announce a timetable for the required actions.

In the letter, AIA SA further notes that it signed on 18 December 2018 the required loan agreements for a bond loan of up to 665.6 million euros jointly through the National Bank of Greece and Piraeus Bank with the European Investment Bank (EIB) granting all the necessary approvals on 18 December 2018.

AIA

In the meantime, AIA SA is required according to the agreement and to IATA standards to proceed with investments of approximately 2.35 billion euros over the expansion period for the upgrade of airport facilities in view of the fact that it exceeded its 90 percent capacity in December. 

Paraschis stresses that delays will inevitably hinder investment projects which include among others a new terminal reported to cost more than 300 million euros.

In relevant news meanwhile, TAIPED is reportedly expected to announce a tender in spring for the sale of its 30 percent stake in AIA.