CAG unit green-lights re-auction of concession for Rio de Janeiro airport
CHANGI Airport Group (CAG) on Friday (Feb 11) announced that its wholly-owned subsidiary, Changi Airports International (CAI), has given the nod for Tom Jobim International Airport's manager to re-auction the asset's concession.
CAI is the majority shareholder of the Brazilian airport's operator, which submitted the re-auction application on Feb 10 to the regulator National Civil Aviation Agency of Brazil (ANAC).
The application is subject to the approval of ANAC, the country's Ministry of Infrastructure, the Investment Partnership Program Council and the president of Brazil, the group said in a bourse filing.
Once approved, following current legislation, a new operator will be defined in an auction structured and launched by the federal government.
Before the completion of the process, the airport's manager Concessionaria Aeroporto Rio de Janeiro will remain responsible for the airport's operations and continue to uphold its operational standards and safety, the filing added.
It will also honour the commitments to and contracts with employees, creditors, tenants and suppliers until the end of its tenure at the airport.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
As the Brazilian air sector was hit hard by Covid-19, CAG intends to perform an updated impairment review of the investment for the financial year ending Mar 31, 2022, which will take into consideration, inter alia, estimated cash flows over an expected period of completing the process of re-auction.
Eugene Gan, chief executive officer of CAI, said Brazil's economic recession and the Covid-19 pandemic made it "untenable for the concession to continue under the existing terms of agreement".
The current concession, which was awarded in November 2013, is for a 25-year term ending in 2039.
CAI's majority stake is for 51 per cent of the airport's operator, with the remaining 49 per cent held by Brazil's state-owned airport operator Infraero.
The application for a re-auction by Tom Jobim International Airport's manager is not expected to result in material financial impact for CAG's current financial year, the statement concluded.
READ MORE:
Copyright SPH Media. All rights reserved.
