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Hungary's government submits revised bid for GIC-backed Budapest Airport

Hungary's government submits revised bid for GIC-backed Budapest Airport

Hungary's government has submitted a revised offer to acquire Budapest Airport from its foreign owners, a source familiar with the matter told Reuters on Friday, as part of efforts to take back into state hands what Budapest sees as national interests.
Prime Minister Viktor Orban's government earlier this year expressed its interest in buying a majority stake in Hungary's main international airport saying its past privatisation had been against the country's "strategic interests".

Orban, a nationalist often at loggerheads with the European Commission on a range of issues, has said he wants to see the airport in domestic hands, but its owners have expressed no interest in selling it. Since Orban took power in 2010, his government has boosted Hungarian ownership in strategic sectors such as energy, banking and the media.

"There was a revised and improved NBO (non-binding offer)," the source said speaking on condition of anonymity.

The source said the revised offer was higher than Hungary's first bid in July, the amount of which was not disclosed, but "still not market price".

The source added that the Hungarian side looked willing to finalise the deal by the end of this year, an "ambitious" deadline considering its possible size.

A Hungarian government spokesperson declined to comment.

Budapest Airport is a fast-growing, medium-sized airport that benefited from a boom in low-cost travel before the pandemic.

Its biggest shareholder with a 55.44 per cent stake is AviAlliance, formerly Hochtief AirPort, owned by Canada's Public Sector Pension Investment Board. Singapore's GIC Special Investments and Canada's Caisse de dépôt et placement du Québec each hold a little over 21 per cent.

The revised offer, which comes shortly before a general election due next spring, suggests it could be even harder for the foreign shareholders to keep their stake despite earlier signals that they sought to do so.

Hungary's debt agency AKK told Reuters last month that part of a 4.4 billion euro (S$6.9 billion) equivalent debt sale could finance potential state asset purchases, with around 2 billion euros raised under an "other discretionary expenditure" bracket.

The AKK declined to comment on whether that could include an airport deal, saying any such decision was up to the government, while the Innovation and Technology Ministry, which is in charge of the airport bid, did not respond to repeated Reuters requests for information on the matter.

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