UK airports operator BAA has secured £7.65 billion worth of refinancing from its banks in a move that will enable it to redevelop large sections of Heathrow and Stansted .
The loan commitment from the nine-strong banking consortium comes after a year of delays to the refinancing, due largely to the credit crunch, which has threatened BAA’s ability to pay for development work at Britain's largest airports .
The company was left saddled with £10 billion debt after being acquired by Ferrovial, the Spanish infrastructure group, in 2006.
Nine banks will provide BAA with a loan of £4.65 billion secured against and for use at Heathrow, Gatwick and Stansted Airports, and have also made an additional £3 billion available for future capital spending.
The funding is expected to be used to build Heathrow East, which will replace Terminals 1 and 2, and to expand Stansted .
BAA is also expected to shortly announce that talks have begun with bondholders that own a further £4.5 billion of debt to transfer them to new bonds backed by income from the London airports .
A further cash injection could also come as talks with other banks to raise more funds from another loan backed by income from Glasgow, Edinburgh, Aberdeen and Southampton airports are said to be at an advanced stage.
An unnamed banking source close to the refinancing said: "These are challenging conditions, so it is a major endorsement of the company and a very important milestone in bringing about the refinancing ."
BAA To Receive Funding From Banks To Redevelop UK Airports
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BAA To Receive Funding From Banks To Redevelop UK Airports
Mon, 09 Jun 2008
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