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July 13, 2021

Hungary Government submits NBO to purchase Budapest Airport stake

Budapest Airport, for which the Hungarian Government submitted an NBO, was seeing a boom in low-cost travel before the pandemic.

The Government of Hungary has reportedly submitted a non-binding offer (NBO) to the shareholders of Budapest Airport (BUD) for taking over the airport.

In May, reports emerged that Prime Minister Viktor Orban’s government is interested in a controlling stake in Budapest Airport, citing that its privatisation was against the nation’s ‘strategic interests’.

Orban aims to put the airport in domestic hands, though so far its owners have not expressed interest in a sale, reported Reuters.

Currently, AviAlliance GmbH, owned by the Canadian Public Sector Pension Investment Board (PSP Investments), holds a 55.44% stake in the airport.

Singapore’s GIC Special Investments and Canada’s Caisse de dépôt et placement du Québec each have approximately 20% stake in the airport.

In an emailed reply to Reuters, AviAlliance said: “We can confirm that the Hungarian Government submitted a non-binding offer to the shareholders of Budapest Airport. In the interest of our co-shareholders and on legal grounds we are obliged to review potential offers.

“Nonetheless, this NBO was not initiated by us. AviAlliance is a committed long-term investor. We deeply hope to be given the opportunity to remain invested in this airport.”

The Hungarian Government has started investing in many key sectors since Orban assumed office in 2010.

As of now, the government does not hold any stake in the airport, which was privatised in 2005.

As a medium-sized airport, Budapest Airport has been benefitting because of a boom in low-cost travel prior to the Covid-19 crisis.

AviAlliance, which owns interests in five airports such as Hamburg, Dusseldorf and Athens, noted that Budapest Airport has been hit severely by the pandemic and resultant travel curbs.

It said: “Yet, we continued our investments in the airport’s infrastructure and operation during the current crisis as we believe in its fast economic recovery and long-term growth potential.”

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