Sydney Airport (SYD), owner of Australia’s largest international airstrip, fell the most in 13 months after Morgan Stanley said it may have to raise equity to meet about A$3.6 billion ($3.8 billion) of spending needs.
The stock slumped 5.5 percent to A$3.08 at the close of Sydney trading, the biggest decline since Dec. 6, 2011. The airport operator dropped below its 200-day moving average price and trading volume was more than six times the daily level in the past three months.
Today’s drop took Sydney Airport’s stock loss in the past two sessions to 7.2 percent. The company may need to spend about A$500 million to repurchase leases on its terminal 3 and Jet Base sites from Qantas Airways Ltd., buy out minority stakes valued at about A$1.1 billion, and commit A$2 billion to capital spending for a long-term plan on its operations, according to Scott Kelly, a Sydney-based Morgan Stanley analyst.
“It is likely there may be some equity required,” Kelly, who rates the stock equal-weight, wrote in a note dated Jan. 9.
Tracy Ong, a Sydney-based spokeswoman for the airport company, said by e-mail that she couldn’t comment on market speculation.
Sydney Airport has a market value of A$5.73 billion and annual capital expenditure averaged A$295 million over its most recent five fiscal years, according to data compiled by Bloomberg.
To contact the reporter on this story: David Fickling in Sydney at firstname.lastname@example.org
To contact the editor responsible for this story: Anand Krishnamoorthy at email@example.com