Sydney Airport Sells for $5.588 Billion

Senator Nick Minchin John Anderson MP

Minister for Finance and Administration, Australia Deputy Prime Minister, Australia

Minister for Transport and Regional Services

25 June 2002

Sydney Airport will be sold for $5.588 billion to Southern Cross Airports Corporation, the Minister for Finance and Administration, Senator Nick Minchin, and the Deputy Prime Minister and Minister for Transport and Regional Services, John Anderson, announced today.

"This is the biggest government trade sale in Australian history. It is also the world’s largest trade sale of an airport," Senator Minchin said.

"This price reflects fair value for Sydney Airport, Australia’s pre-eminent international gateway and transport infrastructure asset.

"Following a very competitive bidding process, the Southern Cross bid was assessed, on balance, as best meeting the Government’s sale objectives which included optimising sale proceeds and ensuring the buyer had the necessary management capabilities and a commitment to the development of airport services."

The Southern Cross bid, sponsored by Macquarie Bank Ltd, the German airport operator HOCHTIEF AirPort GmbH and the Commonwealth Bank of Australia, was one of three highly professional bids received by the Commonwealth.

Mr Anderson said the offer from Southern Cross was a good result for aviation policy.

"Southern Cross has indicated it will ensure the effective development of airport services, consistent with its status as Australia’s busiest passenger and cargo facility," Mr Anderson said.

"Residents of Sydney can be confident that the sale of the airport will not change the Government’s noise management policies in any way - the Government retains full regulatory control. Sydney Airport will continue to be subject to the 80 aircraft movements per hour planning cap, the curfew from 11pm to 6am and the noise sharing policy implemented through LTOP.

"Regional commuters can also rest assured that access for regional airlines will continue to be guaranteed by the Slot Management Scheme and the ACCC will continue to ensure that prices for regional carriers do not increase in excess of the Consumer Price Index.

"In short, no regional airline will be forced to move from Sydney Airport."

Senator Minchin said the proceeds of the sale will go to repaying debt.

After repaying SACL debt, Commonwealth debt will be reduced by $4.233bn.

"This will reduce public debt interest payments by around $250m every year", Senator Minchin said.

Under the terms of the sale, Southern Cross will shortly acquire all of the outstanding shares in SACL, the airport lessee company which operates and manages Sydney Airport under a 99-year lease from the Commonwealth.

The Ministers congratulated their respective departments and the advisers to the sale, Salomon Smith Barney, Freehills, Gavin Anderson & Co, and Sparke Helmore, for their successful management of a complex sale process.

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