Temasek to buy Changi Airport

Singaporean sovereign fund Temasek Holdings will own Singapore's airport by July 2009. The government decided to privatise the airport to give it 'greater flexibility' in a deal that is estimated to be worth up to $2bn.

Temasek Holdings will buy Singapore’s Changi Airport next year as the city-state’s government looks to restructure the Civil Aviation Authority of Singapore by July 2009.

Financial details have not been disclosed, but analysts have estimated the deal is worth between $1.5 billion and $2 billion.

“A corporatised entity will have greater flexibility to attract and retain top talent to compete with global airport operators. It can also better leverage on Changi Airport’s brand name to develop an international presence,” Raymond Lim, the country’s Minister for Transport, said in a speech on Tuesday.

Under the proposed plan, the Civil Aviation Authority of Singapore will be split into two entities. Changi Airport will be owned by a Temasek subsidiary, while a new civil aviation authority will take on strategic and regulatory functions. The new airport company will take on the operational functions of managing Changi Airport and running its international arm, Lim said.

Changi: Temasek's latest

No global private airport operator was been invited to bid for Changi because it is considered a strategic national economic asset, Lim Hwee Hua, the country’s Minister of State for Transport, told Singapore’s Business Times.

Temasek manages assets of S$185 billion ($126 billion; €92.3 billion) as of 31 March 2008. Ten percent of its portfolio is allocated to transportation and logistics.

It owns a 54 percent stake in Singapore Airlines, the country’s national carrier; a 54 percent stake in SMRT, which provides multi-modal transport services in the country; a 66 percent interest in Neptune Orient Lines, a global shipping, logistics and terminal company; and the whole of PSA International, one of the world’s largest port groups.

Earlier this week, Temasek initiated the sale of PowerSeraya, a Singaporean power generation company. The divestment could fetch the fund an estimated $2.5 billion.