Portugal Airport Operator May Be Five Times TAP’s Value

Portuguese airport operator ANA may generate 2.6 billion euros ($3.3 billion) for the government, five times as much as state-owned airline TAP, as investors bet on more reliable returns from infrastructure assets.

Some of the five offers for ANA-Aeroportos de Portugal SA shortlisted by the government yesterday value it at 12 or 13 times last year’s 199.8 million euros in earnings before interest, tax, depreciation and amortization, according to Maria Luis Albuquerque, Portugal’s secretary of state for treasury.

TAP SGPS SA, which attracted one bid, is worth no more than 500 million euros, according to an estimate by Donal O’Neill, an analyst at Goodbody Stockbrokers in Dublin. Portugal is auctioning the companies to raise cash after becoming the third euro-area country to seek a bailout from the International Monetary Fund and European Union.

“TAP is fragile because it relies on a very weak Portuguese market,” said John Strickland, director of JLS Consulting in London. “The jewel in the crown is its Brazilian network, but a buyer would have to take a cold and dispassionate look at short-haul routes that are under pressure from low-cost carriers.”

Earnings Comparison

Sales at Lisbon-based TAP totaled 2.44 billion euros in 2011, almost six times the 425 million euros generated by ANA. In contrast, the airport operator’s Ebitda jumped 22 percent as traffic across its eight Portuguese airports rose 6.7 percent to almost 27.6 million passengers.

The valuation given by Albuquerque for ANA is in line with deals involving European airports over the past two years, according to Olivia Peters, an analyst at RBC Capital Markets.

TAP had a loss of 76.8 million euros last year, when it carried 9.75 million people, with debt amounting to 1.23 billion euros. Even though as many as 13 parties sought information on the airline, only Synergy Group of Brazil, which controls Latin America’s Avianca airline brands, came forward with a non-binding offer, the government said Oct. 18.

Synergy must submit a final bid by Dec. 7, the Finance Ministry said last month in the official government gazette.

Nationality Hurdle

Brazilian investor German Efromovich, who controls Synergy, said yesterday that he’s seeking Polish citizenship based on the ancestry of his parents and grandparents to comply with EU rules that cap airline ownership by investors from outside member countries at 49 percent.

Binding proposals for the ANA sale must be submitted by mid-December, with a winner to be determined by the year’s end and a deal concluded early in 2013, according Albuquerque.

The short-listed bids are from local builder Mota-Engil SGPS SA allied to Colombian engineer Grupo Odinsa SA, Frankfurt airport owner Fraport AG with Industry Funds Management Pty Ltd. of Australia, French builder Vinci SA, Switzerland’s Flughafen Zurich AG, and Sonae Sierra, which runs shopping centers, alongside Argentina’s Corporacion America, which operates 49 airports in Latin America and Europe.

Vinci, Europe’s biggest construction company, offered the highest price for ANA, Portuguese daily Diario Economico reported today, without saying where it got the information. Maxence Naouri, a spokesman for Rueil-Malmaison, France-based Vinci, wasn’t immediately available for comment.

Portugal has hired Barclays Plc, Banco Espirito Santo SA, Citigroup Inc. and Credit Suisse Group AG advisers on the disposal of both TAP and ANA.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE