During Brazil's third round of airport privatizations decided at a public auction in Sao Paulo on 16th of March 2017, Fraport AG, parent company of Frankfurt Airport (FRA), has won the top bid of 1,505.75 million reais (€446.81 million/ $482.65 million) for Fortaleza Airport (FOR) and 382.01million reais (€113.36 million/ $122.45 million) for Porto Alegre Airport (POA).
As a result, Fraport emerged victorious against strong international competition vying for the two Brazilian airports currently operated by Brazil's state-owned Infraero. Along with the concession price, Fraport will pay a fixed fee amounting to five-percent of the airport's annual revenue. The concession will run for 30 years at Fortaleza and for 25 years at Porto Alegre.
Currently holding a 100 percent stake, Fraport will be the sole owner and participant of these concessions. The concessions and future results will be fully consolidated at the Fraport Group level.
Following the takeover of the concessions, Fraport AG said that it expects an additional accumulated EBITDA at the group level resulting from the two airports of around €350 million ($377.07 million)during the first five years and an accumulated negative contribution to the group result ranging from the mid to high double-digit million euros. Due to the takeover of the concessions and the mandatory capital expenditure, Fraport AG also expects an increase in group net debt by up to around €700 million ($754.15 million) in the first five years.
Fraport AG executive board chairman Stefan Schulte said: "We are excited to start working at Fortaleza and Porto Alegre airports soon. Using our extensive expertise, we are committed to further developing both airports markedly for the benefit of the Brazil. For our airline and passenger customers, we will quickly implement improved processes and services as well as attractive Food & Beverage offerings."