London City airport owner prepares for sale

GIP wants new chief executive to review exit options, in hope of eventually fetching £1.25bn

The incoming chief executive of the Square Mile's favourite airport, London City, has been told by its owner to review sale options when he starts in the spring.

Declan Collier, who joins from Dublin airport, has been asked by Global Infrastructure Partners (GIP), which also owns Gatwick, to look at a potential sale in his first months in the job. Investment banking advisers could be selected by the end of the year.

This comes at a time of unprecedented upheaval for the airport industry. Edinburgh is up for sale, Stansted could be soon, and the Government is proposing an airport in the Thames estuary.

Other options for London City, which had 7.6 per cent more passengers last year, include syndicating the equity as GIP did for Gatwick in 2010. For example, Abu Dhabi Investment Authority spent £125m for an estimated 15 per cent shareholding and Calpers, the US pension fund, dished out around £105m for a 12.7 per cent stake.

Sources close to GIP said that a banking appointment would leave City, a favourite with business due to its efficiency and proximity to London's financial centres, able to sell quickly when market conditions improve.

At present, the airport would struggle to fetch much more than the £742m that GIP – then in conjunction with AIG – paid in 2006, despite significant operational improvements. In a buoyant market, GIP and the current minority stake partner Highstar Capital could expect as much as £1.25bn.

If Mr Collier recommends a sale, it is unlikely to take place until late next year when GIP can profit on its investment. A source said: "Timing is the only thing that matters. There are different ways of exiting – GIP looks at what happened with Gatwick and selling slices as a successful model."

Mr Collier replaces Richard Gooding, who will stay on as a non-executive director at the airport. Mr Gooding declined to comment on the potential sale.

Although GIP seems set to, at least, sell down some of its stake in London City, the US-based infrastructure group is believed to be interested in buying Edinburgh airport. The deadline for initial bids on Edinburgh is next month and Royal Bank of Scotland is believed to be advising GIP on its potential offer.

Edinburgh is expected to fetch in excess of £600m, though the price might be slightly depressed as it is a forced sale. The airports operator BAA has been ordered by the Competition Commission (CC) to sell-off Edinburgh, as it is considered to have a near-monopoly in Scotland, just as it was at Gatwick.

BAA, which is owned by the Spanish group Ferrovial, is still fighting the CC's ruling that it should also sell off Stansted. The CC argued that by owning Heathrow and Stansted, as well Gatwick until 2009, BAA was too dominant in the South-east.

However BAA believes that Heathrow and Stansted serve different markets, the former focusing on business and the latter leisure.

The future of UK airport infrastructure was a major talking point last week, after it emerged that the Government would be consulting on the possibility of building a new airport in the Thames Estuary. This is a plan for which London Mayor Boris Johnson has lobbied hard and which would negate the need to expand at Heathrow.

News
people
Sport
Yaya Sanogo celebrates scoring the opening goal with Arsenal's English midfielder Alex Oxlade-Chamberlain
champions leagueLive: All the latest from the Emirates and Bulgaria, where Liverpool face Ludogorets
News
Andy Murray with his girlfriend of nine years, Kim Sears who he has got engaged to
peopleWimbledon champion announces engagement to girlfriend Kim Sears
Arts and Entertainment
An unseen image of Kurt Cobain at home featured in the film 'Kurt Cobain: Montage of Heck'
filmThe singers widow and former bandmates have approved project
PROMOTED VIDEO
News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Langley James : IT Support; Helpdesk, VMware; Manchester, £18k

£16000 - £18000 per annum: Langley James : IT Support; Helpdesk, VMware; Manch...

h2 Recruit Ltd: Business Development Manager - HRO - £70k+ ote

£35000 - £450000 per annum + £3k car, £70k ote: h2 Recruit Ltd: Do you want to...

Citifocus Ltd: Newly Qualified Accountants - Risk Mgmt

£Attractive Package: Citifocus Ltd: Prestigious financial institution seeks to...

Citifocus Ltd: Operational Risk Analyst

£Negotiable: Citifocus Ltd: Experienced operational risk professional with ban...

Day In a Page

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
Can SkySaga capture the Minecraft magic?

Can SkySaga capture the Minecraft magic?

It's no surprise that the building game born in Sweden in 2009 and now played by millions, has imitators keen to construct their own mega money-spinner
Christmas 2014: 23 best women's perfumes

Festively fragrant: the best women's perfumes

Give a loved one a luxe fragrance this year or treat yourself to a sensual pick-me-up
Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?
Nightclubbing with Richard Young: The story behind his latest book of celebrity photographs

24-Hour party person

Photographer Richard Young has been snapping celebrities at play for 40 years. As his latest book is released, he reveals that it wasn’t all fun and games
Michelle Obama's school dinners: America’s children have a message for the First Lady

A taste for rebellion

US children have started an online protest against Michelle Obama’s drive for healthy school meals by posting photos of their lunches
Colouring books for adults: How the French are going crazy for Crayolas

Colouring books for adults

How the French are going crazy for Crayolas
Jack Thorne's play 'Hope': What would you do as a local politician faced with an impossible choice of cuts?

What would you do as a local politician faced with an impossible choice of cuts?

Playwright Jack Thorne's latest work 'Hope' poses the question to audiences
Ed Harcourt on Romeo Beckham and life as a court composer at Burberry

Call me Ed Mozart

Paloma Faith, Lana del Ray... Romeo Beckham. Ed Harcourt has proved that he can write for them all. But it took a personal crisis to turn him from indie star to writer-for-hire