Operators of Turkey’s Giant Airport Pull Plans to Sell Stake

(Bloomberg) -- Owners of a concession to operate Istanbul’s new $11 billion airport abandoned a plan to potentially sell a stake in the venture, according to people with knowledge of the matter.

The four construction firms also terminated a mandate given to Lazard Ltd. to provide a valuation of the airport and manage discussions with possible buyers, the people said, asking not to be identified because the process is confidential. It is too early to sell a stake in the consortium, IGA Havalimani Isletmeleri AS, because the airport only started operating in April, one of the people said.

Operators of Turkey’s Giant Airport Pull Plans to Sell Stake

Five Turkish builders -- Cengiz Insaat, Limak Holding, Mapa Insaat, Kalyon Insaat and Kolin Insaat -- won the right to build and operate the airport and were each awarded equal holdings in the venture. Kalyon Insaat now owns 35% and Cengiz Insaat 25% after Kolin Insaat sold its 20% stake earlier this year. Limak and Mapa each retain a 20% stake.

IGA declined to comment, while Lazard didn’t respond to an email seeking comment.

The change in strategy comes amid earlier skepticism that the partners could attract buyers because of the cost of the 25-year lease, which is expected to total 22.1 billion euros ($24.1 billion). IGA has the biggest corporate debt load in Turkey after borrowing about 5.7 billion euros for the airport, which is 20 miles outside Istanbul on the Black Sea coast and spans an area larger than Manhattan.

The new airport, which Turkish Airlines is using as its new hub, is designed to eventually serve 200 million passengers when all six runways are operational.

TAV Havalimanlari Holding AS, which operated the Ataturk airport that was replaced by the new airport as the main Istanbul hub, surged as much as 4.6%, the most in a month, while Turkish Airlines jumped as much as 3.1% to the highest level since Aug. 6.

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