Mon, 18 Apr 2011 | BUSINESS SALE
The local authority owners of Newcastle airport have erected a ‘for sale’ sign as its loan repayment deadline approaches.
The seven local councils at Durham, Gateshead, City of Newcastle, North Tyneside, Northumberland, City of Sunderland and South Tyneside own 51 per cent of the airport. KPMG is to advise them ahead of a deadline in December 2013 for a £320 million loan repayment originally taken on in 2006.
The operating company for the airport recorded a decrease in profits to £13.8 million for 2009, compared with £19.4 million for the previous year. LA7, the firm that manages the council’s stake is said to be £4.2 million in the red after having to pay £22 million in interest in 2009.
It is understood that if the councils fail to secure a new equity investor to put cash into the airport they will have to sell the stake.
The owner of the remaining 49 per cent of the hub, Copenhagen airport, is also reportedly ready to sell.
Newcastle airport was opened in 1935, and cost £35,000 to build. The first flight linked Croydon, Surrey and Perth, Scotland. In 2005 the airport was the fastest growing with 5 million passengers per year.
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