May 25, 2016 / 6:47 PM / 2 years ago

Brazil seeks $1.4 bln from airport stake sale, source says

RIO DE JANEIRO, May 25 (Reuters) - Brazil airport authority Infraero plans to raise 5 billion reais ($1.4 billion) by selling part of its minority stakes in five airports as early as the end of this year, a source familiar with the plan told Reuters on Wednesday.

According to the source, who requested anonymity because the plan remains under discussion, Infraero will transfer to a subsidiary the 49-percent stakes it owns in five international airports opened in recent years to private concessions.

Infraero is still considering the idea of listing the subsidiary, as it has been discussed for a few years, but the source said there is now a clear preference for selling up to 25 percent of the unit to a strategic partner.

The airports are Rio de Janeiro’s Galeao, Sao Paulo’s Guarulhos, Campinas’s Viracopos, Belo Horizonte’s Confins and the main airport in the capital Brasilia, the source said.

Strained public finances are forcing Brazil’s federal government and state-controlled companies such as Infraero to put assets up for sale, shopping them to investors on an international road show scheduled for mid-July. Asset sales could help plug a record budget deficit expected for this year.

“The well is dry. Nobody can count on resources from the National Treasury in this fiscal scenario,” said the source, who is close to Infraero’s planning. “You’ve got to walk on your own legs. Get profitable and competitive.”

The transaction would help inject cash into Infraero, the source said, noting that a partner does not necessarily need to be a company specialized in airport operations.

Foreign pension funds and banks including Citigroup Inc and Bank of America Merrill Lynch had showed interest in the asset, the source added.

A spokesman for Brazil’s civil aviation secretary declined to comment immediately on the matter.

$1 = 3.60 Brazilian reais Reporting by Rodrigo Viga Gaier; Writing by Brad Haynes; Editing by Andrew Hay

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