British Govt to sell seven airports

Press, 15 July 1987, Page 36

British Govt to sell seven airports

NZPA-Reuter London The Government said Its sale of seven big British airports — the latest step in the Conservative Government’s privatisation programme — would raise £1.23 billion ($3.33 billion) for the State coffers.

Announcing the offer’s pricing formula, it said’it would sell 500 million shares of B.A.A. Pic, formerly the British Airports Authority, more than half going to the public at £2.45 ($6.63) each.

Of the total, SUSIIS million ($193 million) would be sold In advance to financial Institutions and the remaining SUSI2S million ($2lO million) would be sold through a tender, at a minimum of £2.45 ($6.63) the price was in line with share analysts’ forecasts. The Government decided to use a tender after financial institutions complained that the heavy oversubscriptionof

earlier privatisations — including British Telecom, British Gas, and British Airways — left them with hardly any shares. Under the tender system, the price bid for minimum applications of 1000 shares will be the price paid, with the highest offers winning. B.A.A. runs Heathrow, Gatwick and Stanstead airports, all in the London area, and the civil facilities at Edinburgh, Glasgow, Prestiwck and Aberdeen, all in Scotland. The company will become the world’s first publicly traded airports operator when trading in the shares begins on July 28. The share offer closes on July 16. B.A.A. makes nqoney from fees paid by airlines and by concessionaires running car-parks, dutyfree shops and restaurants at the airports. Last month it reported that pre-tax profits for the year ended March 31 rose 10.5 per cent to £B4

million ($227 million.) The B.A.A. chairman, Sir Norman Payne, said profits improved in the second half of the year, after being depressed last year when fears of terrorism in Europe and the Chernobyl nuclear disaster in the Soviet Union sharply cut tourism from the United States. In her eight years in power, the Prime Minister, Mrs Thatcher, has denationalised more than a third of State-owned industries and the number of share owners in Britain has trebled to 9.5 million out of a population of about 56 million. The Government plans to sell the country’s water utility later this year.

Among the State enterprises which have already been sold off to the public are British Airways Pic, the British Gas Pic natural gas utility, British Telecoms Pic and the aero-engine maker, RollsRoyce Pic.