Hungary government offers to buy Budapest airport

The Hungarian government would like to acquire a majority stake in Budapest Airport again through negotiations with theowners, the Innovation and Technology Ministry told Reuters in a statement, adding it was "strategically important to have the airport in Hungarian hands again"

General view of the Ferenc Liszt airport's terminal 2A in Budapest

Budapest - Hungary has offered to buyBudapest Airport from its foreign shareholders, part of aneffort to take it back into state hands and protect what the government says are national interests.

Prime Minister Viktor Orban's government earlier this year expressed its interest in buying a majority stake in Hungary's main international airport saying its past privatisation had been against the country's "strategic interests". Orban, a nationalist often at logger heads with the European Commission on a range of issues, has said he wants to see theairport in domestic hands, but until now its owners have expressed no interest in selling it.

Since Orban took power in2010, his government has boosted Hungarian ownership in strategic sectors such as energy, banking, and the media. The biggest shareholder in Budapest Airport with 55.44% is AviAlliance GmbH, formerly Hochtief AirPort GmbH, owned byCanada's Public Sector Pension Investment Board (PSPInvestments). AviAlliance GmbH said on Monday it had received an offer from the Hungarian government which it had not asked for. "We can confirm that the Hungarian Government submitted anon-binding offer to the shareholders of Budapest Airport. In the interest of our co-shareholders and on legal grounds we are obliged to review potential offers," AviAlliance said in anemailed reply to Reuters questions. "Nonetheless, this NBO was not initiated by us. AviAllianceis a committed long-term investor ... We deeply hope to be giventhe opportunity to remain invested in this airport." Singapore's GIC Special Investments and Canada's Caisse dedépôt et placement du Québec (CDPQ) each hold a little over 21%. CDPQ declined to comment and GIC was not immediatelyavailable to comment.

The Hungarian government would like to acquire a majority stake in Budapest Airport again through negotiations with theowners, the Innovation and Technology Ministry told Reuters in a statement, adding it was "strategically important to have the airport in Hungarian hands again". Orban's government has expanded state ownership in several sectors since he took office in 2010. The state currently has no stake in the airport, which was privatised in 2005. In an interview last month, Innovation and Technology Minister Laszlo Palkovics, who has been put in charge of the airport deal, told website vasarnap.hu that acquiring the airport was key to relaunching tourism after the pandemic, and criticised its owners for not investing enough in the quality ofservices at the airport. Budapest Airport is a fast-growing, medium-sized airport that has benefited from a boom in low-cost travel, but is facing a difficult market due to the pandemic. AviAlliance, which holds interests in five airports including Hamburg, Dusseldorf and Athens, said like all European airports, Budapest has been severely affected by COVID-19. "Yet, we continued our investments in the airport's infrastructure and operation during the current crisis as we believe in its fast economic recovery and long-term growth potential," it said.

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