Government confirms terms for Sydney airport sale

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The Australian government last week ended months of speculation over the future of Sydney Kingsford Smith airport when it announced that it would be privatised through a trade sale, rather than a stock market flotation, later this year.

Sydney Airports Corporation Ltd (SACL) currently owned by the Federal government will be subject to an international tender for a 100% sale to be completed in the second half of this year. Foreign ownership will be limited to 49% and the sale is expected to raise bids of around $3bn for the airport which received a $300m redevelopment before the Sydney Olympics. The new owner will receive the right of first refusal to build Sydney's second airport which is forecast to be necessary within the next ten years.

A clause restricting common management control of Australian airports will affect the involvement of BAA and Schiphol Group, existing investors in Perth and Melbourne, and Brisbane respectively. Investors with a 15% stake in, or practical control of, Brisbane, Perth or Melbourne Airports, will be prevented from obtaining more than 15% of Sydney airport. However, the Government intends to provide for a transitional period of 12 months to allow for changes in ownership at other Australian airports.