CAPE TOWN - THE AIRPORTS Company South Africa (Acsa) has issued a request for proposals for transaction advisory services to advise it about the monetisation of some of its investment property portfolio.
The State-owned airport operator said in a statement that the monetisation process was likely to involve a variety of mechanisms proposed by a transaction advisor, but there was no intention to sell any investment property assets.
Acsa’s assets of more than R30 billion include an investment property portfolio of R7.7bn. Properties in this portfolio had consistently performed above the cost of capital, thereby subsidising landing fees for airlines and passenger service charges for passengers.
Acsa had already reduced annual operational expenditure by R1.2bn, while capital expenditure of R14.5bn had been deferred, due to the Covid-19 environment that has seen borders closed, flights cancelled, travel restricted and global tourism industry grounded.
“In responding effectively we have adapted our strategy to focus on enhancing Acsa’s core aeronautical activities. Our response includes a process to release wealth associated with non-core assets,” said chief financial officer Siphamandla Mthethwa yesterday.
He said the monetisation of non-core investment properties would make cash available for core business activities, as well as reduce the budget allocation to non-core activities.
“We believe our response is necessary to sustain Acsa through the recovery in aviation which will take at least three to five years,” said Mthethwa.
The adverse impact of Covid-19 on global aviation led to Acsa revising its strategy, and financial plan as far back as April 2020. It has engaged stakeholders about expected revenue losses because of the lockdown, while there was a R11bn requirement over six years to get back to pre-Covid-19 performance levels.
BUSINESS REPORT