London City cool Southend interest; looking at Gatwick
05.10.08
London City Airport is reportedly cooled its interest in the £100m auction of Southend Airport, and has turned its attention to Gatwick. The Independent quotes a 'source' close to London City owners AIG and Global Infrastructure Partners (GIP) saying: ‘There's bigger fish to fry. We've not pulled out, but we're not progressing work. With the problems in the debt market, [Southend owner] Regional Airports missed the boat and should have sold it a year sooner.’
If confirmed, the move is a huge blow to the Southend Airport sale, as London City was thought to be the hot favourite. There are reported to be up to three more parties competing in an auction that has already lasted more than seven months. A preferred bidder was expected to be announced two months ago.
Our one big concern about the story is that AIG are widely reported to have agreed to sell their stake in London City to GIP, and would not be looking to invest in anything at the moment given that they are selling assets in order to pay back a $85bn loan from the UK Treasury. Other than that, it makes sense.
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