ACSA plans to sell investment property portfolio, non-core assets

• ACSA indicated a requirement of R11 billion over six years to get back to its pre-Covid-19 performance levels.
  
• The transaction adviser, once appointed, will assess, and advise on the appropriate monetisation programme and the portfolio.
  

February 11, 2021: Airports Company South Africa (ACSA) is revising its strategy and financial plan as far back as April 2020 due to the adverse impact of Covid-19.

The company engaged all key stakeholder indicating revenue losses because of the lockdown. It further indicated a requirement of R11 billion over six years to get back to its pre-Covid-19 performance levels.

ACSA has since received some support from government (its major shareholder) through the issuance of preference shares and by securing credit facilities from lenders. The company continues to make progress in its drive to enhance liquidity and to secure its long-term sustainability through transactions that monetise assets and activities that significantly reduce both operational and capital expenditure.

The monetisation process is likely to involve a variety of mechanisms proposed by a transaction advisor. However, ACSA has no intention to sell or otherwise dispose of any investment property assets. The transaction adviser, once appointed, will assess, and advise on the appropriate monetisation programme and the portfolio.

Airports Company South Africa's asset base of more than R30 billion includes an investment property portfolio of R7.7 billion.

"In responding effectively to the devastating impact of the pandemic we have adapted our strategy to focus on enhancing Airports Company South Africa's core aeronautical activities. Our strategic response includes a process to release wealth associated with non-core assets,"said Siphamandla Mthethwa, chief financial officer.

"Before Covid-19, Airports Company South Africa enjoyed a reputation as a well-run state-owned company. We believe that this reflects qualities embedded in our culture that position Airports Company South Africa to manage through the crisis in the best way possible," said Mthethwa.

Airports Company South Africa has also announced the sale of its 10 percent equity holding in Mumbai International Airport Limited (MIAL) for approximately R1.2 billion. Mthethwa stated that the sale of the stake in MIAL marks a successful and profitable exit for ACSA from the investment the company made in 2006.

The sale to Adani Airport Holdings includes the transfer of airport operator rights held by Airports Company South Africa to MIAL. This means that the company will also be released from providing an Airport Operator Guarantee that amounted to R700 million in the 2020 financial year. "From the outset in 2006, Airports Company South Africa provided management expertise to the airport and supported its infrastructure development and expansion. We are proud of the achievements we have supported at Mumbai International Airport over the past 15 years," stated Mthethwa.