10/1/2015

Singapore Changi, Odebrecht to Buy Rio Airport for $8.3 Billion - Bloomberg Business

SingaporeChangi,OdebrechttoBuyRio
Airportfor$8.3Billion
November23,20137:15AMBRST

TAMAirlinesplanessitonthetarmacattheGaleaoInternational
AirportinRiodeJaneiro.Photographer:DadoGaldieri/Bloomberg

Nov.23(Bloomberg)Brazilsoldthecountryssecondbusiestairportforalmostfourtimesthe
minimumbidaspartofPresidentDilmaRousseffsprogramtomodernizeinfrastructureandshoreup
investorconfidence.
OdebrechtSAanditspartner,aChangiAirportGroupunit,offered19billionreais($8.3billion)torun
GaleaoairportinRiodeJaneiro,whichwillhosttouristsforthesoccerWorldCupnextyearandthe
2016OlympicGames,for25years.Thatcompareswiththeminimumrequiredbidof4.83billionreais.
ThecontractisexpectedtobesignedinMarch,ChangiAirportsInternationalsaidinanemailed
statementtoday.
TherealsurgedastheauctionshowedRousseffcanattractinvestorstoher212billionreaisplanfor
improvingroads,railways,portsandotherinfrastructureevenasgrowthinLatinAmericaslargest
economyslows.Thegovernmentisunderpressuretocompletetheprojectsasthecountrypreparesto
welcomeaprojected600,000internationalvisitorsfortheWorldCupinJune.
ThosepessimisticaboutBrazilwillhaveabitterdaytoday,Rousseffsaidyesterdayinaspeechinthe
northeasterncityofFortaleza.Theairportauctiondidntgowrong.
TherealroseasthepremiumonGaleaoairportboostedspeculationmoredollarswillflowintoBrazil,
http://www.bloomberg.com/news/articles/2013-11-22/singapore-munich-operators-to-pay-9-1-bln-for-brazil-airports

1/4

10/1/2015

Singapore Changi, Odebrecht to Buy Rio Airport for $8.3 Billion - Bloomberg Business

accordingtoPabloSpyer,adirectoratMiraeAssetManagementinSaoPaulo.Thecurrencyadvanced
1.1percentto2.2794againstthedollaryesterday.

BestQuality
TheLatinAmericanaviationmarketpresentsmanygrowthopportunities,LeeSeowHiang,chief
executiveofficerofSingaporesChangiAirportGroup,saidinthestatement.Wemustfocus
immediatelyontheexpansionoftheGaleaoairport.
Thefirstphaseoftheairfieldsexpansionwillincludebuildinganadditional26airbridgesandparking
lotsbyApril2016,accordingtothestatement.Theairportwillbeabletohandlemorethan60million
passengersannuallybyendoftheconcessionperiod,itsaid.
SingaporesairtransportsystemisrankedfirstforqualityintheWorldEconomicForumslatestGlobal
CompetitivenessReport,basedonasurveyofmorethan13,000businessleaders.Brazilssystem,by
contrast,ranks123rdonthelistof148countries.
Changiisbuildingafourthterminaltoraiseitscapacityto82millionpassengersayearby2017.Itwas
rankedtheworldsbestairportbySkytraxearlierthisyear.Theairfieldwasthe13thbusiestinthefirst
eightmonthsof2013,accordingtotheAirportsCouncilInternationalinMontreal.

ThreeAirports
Lastyear,Brazilsoldlicensesforthreeairports,includingBrasiliaandSaoPaulosGuarulhos,fora
totalof24.5billionreais.Afterward,thegovernmentwascriticizedforsettingtermsthatfailedtodraw
theworldsbiggestairportoperators,sothetermswereredrawnfortheauction.
IdontthinkOdebrechttoreupmoneywiththeirbid,thatsnotforustosay,consideringwhatwebid
onGuarulhoslastyear,saidAntonioCarlosMataPires,vicepresidentofOASInvestimentosSA,inan
interviewattheauction.OASisaninvestorinInvepar,whichledthegroupthatwonGuarulhoslastyear
witha16.2billionrealbid,almostfivetimestheminimum.
TheauctionisasuccessofBrazilianstylecapitalism,apartnershipofgovernmentandtheprivate
sector,AdrianoPires,headoftheBrazilianCenterforInfrastructureinRiodeJaneiro,saidbyphone.
Rousseffsinfrastructuredrivehassufferedaseriesofdelaysandrevisions.Thegovernmenthasnotyet
auctionedanyrailwayorportconcessions,whichitoriginallypledgedtodothisyear.Ithaspushedback
itshighspeedrailprojecttoconnectRioandSaoPaulountilafterpresidentialelectionsnextOctober.

RoadAuctions
http://www.bloomberg.com/news/articles/2013-11-22/singapore-munich-operators-to-pay-9-1-bln-for-brazil-airports

2/4

10/1/2015

Singapore Changi, Odebrecht to Buy Rio Airport for $8.3 Billion - Bloomberg Business

Earlierthisyear,thegovernmenthadtoboosttherateofreturnforroadprojectsafteraninitialoffer
didntgenerateinterest.Still,oneoftworoadsauctionedinSeptemberdrewnobids.
ThegovernmentinOctoberawardedLibra,thecountryslargestoildiscoveryandfirstpresaltfield
auctioned,toagroupincludingstaterunPetroleoBrasileiroSA,RoyalDutchShellPlc,andTotalSA.
Thebidinvolveda15billionreaissigningfee,andLibrarequiresspendingofabout400billionreais
over35years,accordingtoregulatorANP.

ConfinsBid
TheAerobrasilgroupledbyCCRSA,includingtheoperatorsofMunichsandZurichsairports,
yesterdaywontherighttooperatetheConfinsairportinBeloHorizontefor30years.Thegroupoffered
1.82billionreaisversusaminimumbidof1.1billionreais.CCRsharesclosed1.3percenthigher
yesterday.
Thegovernmentwillauctionthreehighwaysbeforeyearend,FinanceMinisterGuidoMantegatold
reportersyesterdayinBrasilia.Oneofthoseroadprojectsisriskyintermsofattractingbidders,
accordingtoJeffersonFinch,ananalystfrompoliticalriskconsultancyEurasiaGroup.
Iftheycanfollowthisupwiththreesuccessfulhighwayauctions,itcouldreallybeveryhelpfulin
turningtheboatofsentimentawayfromnegativetomorepositive,Finchsaidbytelephoneaboutthe
airportauction.Itsgoingtobeanincrementalprocess,butthisisgoingintherightdirectionfor
Brazil.
Brazilscurrencyhasclimbed1.5percentoverthepastfivedays,itsfirstweeklyrallysinceOct.18and
morethanallmajorcurrenciestrackedbyBloomberg.Thatfollowsa10percentweakeningthisyear
amidspeculationthecountrymaybedowngradedbyStandard&Poors.

NegativeOutlook
S&PinJuneplacedBrazilsratingonnegativeoutlook,citingweakgrowth.Rousseffwillendherfirst
termnextyearwiththeslowestfouryearexpansionofgrossdomesticproductsince1990,accordingto
thelatestcentralbanksurveyofeconomists.
Brazilseconomygrew2.7percentin2011and0.9percentin2012.Analystssurveyedbythecentral
bankforecast2.5percentexpansionthisyearand2.1percentnextyear.
BrazilsstaterunmanagementcompanyInfraerowillretaina49percentstakeintheairports,andthe
winningbidderswillcontribute5percentofannualrevenuetosupportthecountrysotherairports.
FivegroupssubmittedbiddingdocumentsonNov.18.BrazilrequiredbiddersforGaleaotohave
http://www.bloomberg.com/news/articles/2013-11-22/singapore-munich-operators-to-pay-9-1-bln-for-brazil-airports

3/4

10/1/2015

Singapore Changi, Odebrecht to Buy Rio Airport for $8.3 Billion - Bloomberg Business

experiencemanagingairportsthathandle22millionpassengersayear,andforConfins12million
passengers.
Galeaohandledmorethan17millionpassengersin2012,accordingtothecivilaviationagency,known
asAnac.ConfinsisthefifthbusiestBrazilianairport,handlingmorethan10millionlastyear.
InvestmentinGaleaoisexpectedtoreach5.7billionreais,includingcargostorageinstallationsintime
forthe2016Olympics,accordingtoAnac.InvestmentforConfinsincludesconstructionofanew
terminalandrunway,andwillreachabout3.5billionreais.
Thisnotonlyshowsthecompaniesinterest,becausethewinnerswerelargeairportcompanies,
Rousseffsaid,accordingtothepresidentialpalaceblog.Itshowstheimmenseinterestofinternational
investorsinBrazil.
Tocontactthereportersonthisstory:DavidBillerinRiodeJaneiroatdbiller1@bloomberg.net
ChristianaSciaudoneinSaoPauloatcsciaudone@bloomberg.netTasFuocoinSaoPauloat
tfuoco1@bloomberg.net
Tocontacttheeditorresponsibleforthisstory:AndreSolianiatasoliani@bloomberg.net

http://www.bloomberg.com/news/articles/2013-11-22/singapore-munich-operators-to-pay-9-1-bln-for-brazil-airports

4/4