BAA has announced a proposed £500 million equity injection into its London airports group.
The injection will consist of £200 million of new equity from shareholders and £300 million from BAA Airports Limited and FGP Topco Limited, the ultimate holding company of BAA, which is jointly owned by BAAs three controlling shareholders and in which Ferrovial owns a controlling stake. The funding will be used to pay down debt, strengthen the groups medium-term financial ratios and help it borrow money to fund capital projects.
The £300 million equity injection from BAA Airports Limited and FGP Topco Limited has been approved by the relevant boards. The £200 million of new equity from shareholders requires the formal approval of BAAs three controlling shareholders
The injection furthers BAAs strategy of developing a long-term platform to finance its rolling programme of investment to upgrade its London airport facilities and improve service to customers.
The move follows Octobers announcement of the Department for Transports measures to strengthen the financial resilience of major airports, which removed key uncertainties for BAA and its creditors; the sale of Gatwick, the net proceeds of which will be used by BAA to pay down debt; and the encouraging improvement in recent passenger traffic figures, particularly at Heathrow.