German airport operator Fraport has decided to sell its entire 24.5% stake in Xi’an Xianyang International Airport in Central China to Chang’an Huitong for $174m (RMB1.11bn).
Fraport obtained the stake in Xi’an in 2008. With this divestiture, Fraport concludes its business in China.
Fraport CEO Dr Stefan Schulte said: “We reflect on our activity in Xi’an with great satisfaction, but also some disappointment. On the one hand, the Xi’an subsidiary gave us an opportunity to showcase our expertise in airport management.
“Indeed, over the past 14 years, Fraport successfully developed Xi’an from a medium-sized regional airport with about 10 million passengers annually to one of China’s largest aviation gateways, serving more than 40 million passengers per year.
“On the other hand, we always regarded our minority stake in Xi’an as a starting point for expanding our business in China, the most populous country in the world. However, this never materialised in Xi’an or at any other Chinese airport.”
Completion of the deal is scheduled in the second quarter of this year.
Fraport estimates that the divesture would create a positive impact on its operating result (EBITDA) and the financial result (net profit).
The cash flows from the sale will also further cut down the group’s net financial debt.
Last month, a joint venture of Fraport and TAV Airports paid an upfront fee of $2bn for a new concession to operate Turkey’s Antalya Airport for 25 years, until 2051.