The terms of Fraport’s exit from Pulkovo capital will be agreed upon by the end of 2023

By the end of 2023, the parameters for the exit of the German company Fraport from the authorized capital of Northern Capital Gateway LLC (manages Pulkovo Airport in St. Petersburg) will be determined, the chairman of the board said on September 12 at EEF-2023 at a meeting with journalists VTB Andrey Kostin.

“The Germans will withdraw (from the authorized capital of Fraport,” Vedomosti). They didn’t want to do this for a long time, but they have to. We have been discussing this topic for a year now,” said the head of the bank.

According to him, today a search is underway for a buyer of the German holding’s share. “Everyone who has airports in Russia is interested in shares in Pulkovo,” he added.

According to Andrey Kostin, foreign buyers were also among those interested in buying out the share.

Vedomosti’s source in one of the Russian airport holdings claims that VTB offered market participants to buy out the share of VSS about a year ago. “Recently, Fraport and VTB have not returned to us with this initiative. Apparently, they are working on various mechanisms,” he suggested.

According to his estimates, the share repurchase price is six times the annual EBITDA. Taking into account the 50% discount that foreign investors must provide when exiting the capital of Russian companies – threefold.

The net profit of VSS according to RAS in 2022 amounted to 4.8 billion rubles, which is 23.3% more than in 2021. Revenue amounted to 17.23 billion rubles.

Vedomosti requested the airport holdings Airports of Regions, Novaport and Aerodinamika.

Pulkovo Airport is one of the three largest airports in Russia in terms of passenger traffic. In 2022, the airport served 18.2 million passengers (an increase of 0.6% compared to 2021) and ranked third in the country in terms of performance. In second place is the capital’s Domodedovo Airport with 21.2 million people. Sheremetyevo remains the largest airport in Russia; last year it served 28.4 million passengers.

By the end of 2023, Pulkovo can reach second place in passenger traffic: in May-August, the airport ranks second in the country in terms of this indicator, this statistics is provided by the BBC on its telegram channel.

The base carrier of the airport is Rossiya Airlines, a subsidiary of Aeroflot.

The German Fraport owns 25% of the capital of VSS, the same amount belongs to the Qatar Investment Fund and a consortium of investors (RDIF, Mubadala, Baring Vostok). VTB owns 25.01% of the airport’s shares.

In May 2022, Fraport CEO Stefan Schulte said in a statement to shareholders that the company would not be able to sell its 25% stake in VVS “at least until 2025.” The company announced its intention to withdraw from the capital of the airport after the start of the SVO in Ukraine, clarifying that the concession contract excludes the sale of the stake.

Fraport estimated the value of its stake at 111 million euros.

“Fraport will of course do everything in its power to recover its assets and avoid losses to the maximum extent possible. At the same time, we fully support and respect the sanctions being applied and becoming increasingly severe.” – said the company’s statement.

Executive Director of Aviaport Oleg Panteleev believes that in the current situation, when Pulkovo is steadily turning a profit and has the potential for further development given the growth in passenger traffic, there will be those willing to buy out Fraport’s share both in Russia and abroad.

Fraport brought its competencies in the field of construction of air terminal complexes and management of airport activities when it was part of the capital of the Air Force, but today Russian management has adopted the best practices and can develop the project independently, the expert said.