BAA, debt and the competition commission

In March, BAA raised £265m from the sale of 33 properties owned in a joint venture with Morley Fund Management. A sale of one of its valuable airports assets would, “kill two birds with one stone”, according to Simon Denham, managing director at Capital Spreads. The firm owns Heathrow, Gatwick, Stansted, Edinburgh, Glasgow, Southampton and Aberdeen airports. A Competition Commission report into BAA published last month said the firm “dominates the airports markets in the south-east of England and in lowland Scotland”. BAA is in the process of trying to renegotiate its debt, but is also under pressure to sell one or more of its airports to boost competition.

Spain’s Ferrovial borrowed heavily to fund the £10bn purchase of Heathrow and Edinburgh airport and has slowly fallen into debt because of it. BAA said so far it lacked “sufficient commitments” from banks for its refinancing plans mostly die to the credit crunch.