Business 15 November 2021, 5:27pm

Hungarian gov't one step closer to buying Budapest Airport

Portfolio

The owners of Budapest Airport have entered into a due diligence process with the Hungarian government, its majority shareholder said on Monday, potentially the first step towards a sale of the asset to the state, Reuters reported.

Prime Minister Viktor Orbán, a nationalist often at loggerheads with the European Commission, has said for months that he wants to see the airport in domestic hands, but its owners had so far expressed no interest in selling it.

It is right if our only really serious international airport is in Hungarian hands therefore it is right to buy it back, and the economy is strong enough for us to do that. The transaction can be concluded at any moment

, said Orbán on 19 October.

Local media reported late last month that Hungary had offered 4.44 billion euros for the airport, a figure which neither its biggest shareholder AviAlliance GmbH, formerly Hochtief AirPort GmbH, nor the government confirmed.

But AviAlliance confirmed on Monday that a consortium led by the Hungarian government had submitted a revised non-binding offer to buy the airport.

The Hungarian government has accepted our terms and conditions for starting formal negotiations. Therefore we have decided to enter into a due diligence process

, AviAlliance said in a statement.

“While this is potentially the first step towards the sale of the airport, we want to emphasise that the outcome of such a process is not predetermined.”

AviAlliance, which holds a 55.44% stake in the airport, is owned by Canada’s Public Sector Pension Investment Board (PSP Investments). Singapore’s GIC Special Investments and Canada’s Caisse de depot et placement du Quebec (CDPQ) each hold a little over 21%.

Orbán (58), in power since 2010, is facing an election next spring which could be his toughest challenge yet. His government has already increased Hungarian ownership in strategic sectors such as the media, energy and banking. Over the weekend, he told a congress of his Fidesz party that the cabinet would repurchase Budapest Airport and carry out investments in the fast-growing hub that had benefited from a boom in low-cost travel before the pandemic.