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Gatwick acquisition to enhance quality and stability of Vinci’s cash flow

Publication Date: 21 Jan 2019 - By ReachX Team By ReachX T.

Equity Fundamental Equity UK EU Transport


The acquisition of London’s Gatwick airport by French construction and concessions company Vinci (EPA:DG) would enhance the quality and stability of the latter's cash flow, according to a leading rating agency. 

In a recent note to its clients, Fitch Ratings said there would be no rating impact on Vinci (rated A-/Positive) from the largely positive acquisition of its controlling stake in the British airport.

At end-2018, Vinci announced a debt-funded acquisition of a 50.01% stake in Gatwick for approximately £2.9bn. Global Infrastructure Partners (GIP), the largest existing shareholder, will continue to manage the remaining 49.99%.

Vinci expects the transaction to close by end-June 2019 and to fully consolidate Gatwick in its accounts. 

The acquisition will moderately re-leverage the group but will also enhance the quality and stability of its cash flow generation, Fitch added.

“We estimate that Vinci's average pro-forma leverage between 2019 and 2022, without assuming major acquisitions, would remain near but below 3.0x, our current upgrade sensitivity to an 'A' rating.” 

However, at the next review following the transaction close, the enhanced quality of group cash flow generation is likely to result in a relaxation of the current leverage guidance. Fitch expects the contribution of the stable infrastructure and concession business to the consolidated EBITDA to increase to 76% (2019 pro-forma) from 72% (2017) and thus dilute the impact of cyclical contracting activities. 

The Positive Outlook continues to reflect Vinci's significant financial flexibility and accommodates potential re-leveraging should Vinci make a moderate debt-funded acquisition, Fitch added. 

Vinci is a world construction and infrastructure player with activities spanning toll roads, airports and construction. It is a global engineering and construction company, with a dominant share in the French market, and the largest toll road operator in France through its strategically located ASF, Cofiroutes and Escota concessions. Vinci also operates a diversified portfolio of assets across the world. 


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This contribution is for informational purpose and does not constitute investment advice nor is it an offer to sell or buy, nor is it a recommendation for any security.

ReachX T.


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