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PM Tsipras: Fraport’s Investment an Important Moment for Greece

Impression of Thessaloniki’s airport.

Impression of Thessaloniki airport.

Prime Minister Alexis Tsipras on Wednesday said Fraport’s investment in the country’s 14 regional airports is an “important moment for Greece.”

The Greek PM made the statement during a meeting with representatives of the German-Greek consortium Fraport Greece, following the latter’s upfront payment of 1.234 billion euros on Tuesday to Greek state privatization fund TAIPED. With the upfront payment Fraport Greece commenced the 40-year concession for managing, operating and developing 14 regional airports on the Greek mainland and popular holiday islands.

“Today you are sending a strong message with the investment of 1.234 billion euros,” PM Tsipras was reported saying to Fraport’s representatives, adding that the government’s goal from the start was for the image of the airports to improve ahead of the tourism season. “We are now certain that it will improve,” he said.

Along with the upfront fee, an annual fixed concession fee of 22.9 million euros will be paid to the Greek State, as well as a variable annual fee based on 28.5 percent of Fraport Greece’s yearly operational profit (EBITDA – earnings before interest, tax, depreciation and amortization). According to TAIPED, the amount of these revenues in total will exceed 10 billion euros in the duration of the concession.

Impression of Skiathos airport.

Impression of Skiathos airport.

The airports now under the management of consortium Fraport Greece are: Aktion (PVK), Kavala (KVA), Thessaloniki (SKG), Kerkyra/Corfu (CFU), Chania/Crete (CHQ), Kefalonia (EFL), Kos (KGS), Mytilene/Lesvos (MJT), Mykonos (JMK), Rhodes (RHO), Samos (KGS), Santorini (JTR), Skiathos (JSI) and Zakynthos (ZTH). Actual ownership of the airports is retained by the Greek State.

Fraport Greece is 73.4 percent owned by the Frankfurt-based airport operator Fraport AG and 26.6 percent by Copelouzos Group.

Impression of Kefalonia airport.

Impression of Kefalonia airport.

“Since being selected as the winning bidder for the Greek Regional Airports in 2014, we have remained steadfastly committed to this visionary project,” Fraport’s CEO, Dr. Stefan Schulte said in an announcement on Tuesday.

“We believe in Greece and its potential as one of the greatest travel destinations in the world. The goal of Fraport Greece is to enhance the travel experience for visitors from around the world – by upgrading and expanding facilities and by improving operational processes, shopping and services.”

Approximately 968 million euros in long-term financing for the Greek regional airports project is being provided by a consortium of leading financial institutions. Some 280 million euros of the total loan will be used to finance construction projects at the 14 airports, while 688 million euros were used as part of the upfront concession payment to TAIPED. Fraport Greece recently raised its total capital to 650 million euros.

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