Xiaoshan airport may list next year
Updated: 2008-03-21 07:10
By Amy Lam(HK Edition)
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Hangzhou, Zhejiang province: Xiaoshan International Airport, in which the Hong Kong Airport Authority (HKAA) has a 35 percent stake, may go public early next year in Hong Kong, Shanghai or both.
The move aims to raise funding for its second-phase airport expansion to capture the growing demand for international flights and to establish a low-cost logistics platform serving the region.
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Hangzhou's Xiaoshan International Airpor may list in Hong Kong or Shenzhen. The company, whose monitoring office is shown here, is owned in part by the Hong Kong Airport Authority. Amy Lam |
"We have formed a team to study the possible IPO and other financing options," Eric Wong, chief executive officer of the airport operator, said yesterday. "The preparation work for the IPO can be completed in one year, but the actual timing will depend on the market conditions."
The construction of the second-phase expansion, which covers a site of about 5 sq km, with two new terminals for international and domestic passengers, started last November and is planned to be completed in 2010.
The firm now estimates that the expansion will cost 10 billion yuan, up from 6.8 billion yuan it estimated in 2006, due to price hikes of raw materials, Wong said.
The airport plans to fund the project by profits from operations and the 2 billion yuan investment from HKAA last year. The rest of the funding will be raised either from the market or bank loans.
The revenue of the airport operator is estimated to be 1 billion yuan this year, compared with 800 million yuan in 2007.
Xiaoshan International Airport was the first mainland airport with overseas strategic investors.
The cooperation with its Hong Kong peer, which started in December, 2006, has helped Xiaoshan airport attract more international flights through Hong Kong while such arrangements have strengthened Hong Kong's position as a regional transitional hub.
"I think the airport business is very attractive to international investors," said Wong, noting that the airport operator is open to all options, including a dual-listing or listing in either Shanghai or Hong Kong.
Wong said it is hard to say whether stakes of HKAA will be diluted after the IPO, as it will depend on many factors such as size and offering structure. But HKAA hopes to maintain its share holdings in the 30-year partnership.
The airport aims to carry 25.6 million passengers, serve 500,000 flights and deliver 500,000 tons of cargo in 2015, compared with 13.46 million, 130,000 and 226,000 tons, respectively, last year.
(HK Edition 03/21/2008 page2)