Oaktree Is Exploring Options for Texas Airport Terminal

(Bloomberg) -- Oaktree Capital Group LLC is exploring options including a partial sale of its right to operate Austin-Bergstrom International Airport’s south terminal, according to people with knowledge of the matter.

Oaktree is working with an adviser to solicit interest from prospective suitors, said the people, who asked not to be identified because the talks are confidential. An equity injection would fuel the terminal’s expansion beyond the three gates it operates, one of the people said. A representative from Oaktree declined to comment.

The Los Angeles-based alternative investment firm holds a 40-year lease for the Texas terminal -- which was rehabilitated for commercial use starting in 2017 -- through LoneStar Airport Holdings LLC, according to its website. Discount carriers Allegiant Air and Frontier Airlines use the terminal, which also offers onsite parking.

Though airport privatizations in Europe, the U.K. and Australia have generally been well-received by the public, U.S. facilities are a scarce commodity for investment firms seeking infrastructure deals.

Two attempts to privatize Chicago Midway International Airport failed, and a similar plan for suburban New York’s Westchester County Airport was put on hold last year. Investment firms have instead turned to terminal deals such as Oaktree’s Austin lease. Carlyle Group LP and JLC Infrastructure are part of a consortium redeveloping and expanding John F. Kennedy’s Terminal One.

Oaktree has previously been active in the airport industry. It co-owned a 40-year lease and concession to operate the Luis Munoz Marin International Airport in San Juan, Puerto Rico.

To contact the reporter on this story: Gillian Tan in New York at gtan129@bloomberg.net

To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net, Josh Friedman, Dan Reichl

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