DEVON County Council announced today (02 06 06) that it is short-listing 13 potential buyers for Exeter International Airport.
The Council received 58 expressions of interest in Exeter International which is one of the UK’s fastest growing regional airports.
Prospective purchasers were sent a pre-qualification questionnaire (PQQ) to assess initially their financial credentials and relevant experience.
An evaluation of those responses has produced a first round shortlist of 13 contenders who have now been asked to submit an indicative financial offer as well as their outline development proposals for Exeter International.
Short-listed contenders include well known names from the worlds of airport operations, banking and construction.
These will then be whittled down again to a second round shortlist of bidders each of whom will be given individual access to detailed confidential information about the airport’s finances, contracts, leases and statistical data following which they will be invited to submit their detailed business plans and final bids for the airport by mid September.
Final evaluation of bids and selection of a preferred bidder with whom the County Council would then conduct detailed negotiations will be made by an all-party group of senior councillors and advisors, led by Council Leader Brian Greenslade, with the aim of completing a sale in the autumn.
Devon County Council announced its intention in April in the national and aviation industry press to sell a majority stake in the Airport. However, rather than having to negotiate how large a majority stake should be offered and how much it should retain, the judgement now, based on professional advice, is that the Council’s objectives and its requirement to deliver best sale value can be better achieved through selling virtually its entire shareholding, but retaining a Special Share (often referred to as a ‘Golden’ share) which will give the Council defined rights to protect its interests.
And to protect itself against a quick re-sale by a new owner at a profit –although there is no expectation that that would happen — the Council will also include a special clause in the legal documentation to cover that scenario.
With passenger numbers at Exeter International rising by 36% in 2005, up from 618,201 to 842,461, it’s not surprising that companies and consortia showing interest in buying the airport include operators of other UK and European airports, as well as major financial institutions.
The County Council believes that its paramount objective — the longer-term future and growth of the airport — will be best secured by attracting a multi-million investment in Exeter International through the sale of its holding in the airport company, Exeter and Devon Airport Ltd (EDAL).
And in a move designed to tackle what was seen as a major public relations weakness in the previous sale bid, the preferred bidder for Exeter International will be expected to maintain effective communications with community representatives, including business leaders, MPs and the media, about its intentions for the airport.
All but one of the short-listed contenders have indicated a clear interest in acquiring valuable business development land on the County Council’s prime “Skypark” site on the northern side of the airport.
Commenting on the response by prospective purchasers, Council Leader Brian Greenslade said: “Our paramount objective is ensuring the continuing success of Exeter International Airport and securing its position as a driving force in the Devon economy.
“We have a duty on behalf of the tax-payers to secure the best value for this major public asset, but best value is more than just money; it is also importantly about what’s best for the airport, the local economy and our customers.
“These are the priorities we are focusing on. If we also attract a great cash offer then that will be even better. Money raised from the sale will help to fund public service improvements in Devon.
“As far as Skypark is concerned we’re taking a practical approach; we want to see it developed quickly and we want to get best value for the land. We’re not going to second guess the market, if prospective purchasers want to talk to us about acquiring the airport and Skypark, or the airport on its own then we’re happy to consider proposals that meet our objectives.
“We expected keen interest in the sale and haven’t been disappointed. It has been a terrific response particularly considering that we also received over 70 expressions of interest in the first sale process and a number of those who were ruled out early on last time will not have thrown their hats in the ring again. Now we need to learn more about each of the short-listed prospective purchasers so we can decide who should go through to the next round.
“It would be nice to be able to say now who the short-listed names are, but of course we must respect people’s right to confidentiality at what is still an early stage.
“There’s still a long way to go and the selection of a preferred bidder will be quite a lengthy process with extreme care being taken at every stage to ensure we make the right choice. One area we will look at closely, for example, will be the ability to market the airport and Devon effectively, and to maintain good communications with the business community, the media and other important contacts.
“The sale process will be as open as it can be taking into account companies’ own commercial sensitivities.”