Morgan Stanley, CIBC win mandate for sale of Canadian airport concessions

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Photo by Richard Lam/PNGThe Canadian government has hired Morgan Stanley and Canadian Imperial Bank of Commerce to advise on selling the operating rights to the country’s four largest airports, according to people with knowledge of the discussions.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountPrime Minister Mark Carney formally announced plans to seek private investment in the government-owned assets during a speech at an investment conference on Tuesday. Canada’s four busiest airports by passenger volume are Toronto Pearson International Airport and the hubs in Montreal, Vancouver and Calgary.Representatives for Morgan Stanley and CIBC declined to comment on Thursday. Canadian government officials didn’t immediately reply to requests for comment.Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try againThe government expects the deals to raise tens of billions of dollars, according to Carney. The proceeds would be directed toward regional airports and other infrastructure, including local transportation projects and potentially a sovereign broadband network linking Canada more directly with Europe and Asia. The people with knowledge of Morgan and CIBC’s role spoke on condition they not be identified because the matter is still private.Under the proposed structure, Canada would retain ownership of the underlying airport land and assets while granting investors long-term “concessions” to operate the facilities.The hiring of advisers marks another step toward what may become one of Canada’s largest-ever infrastructure transactions — and a sizable new investment opportunity for pension funds and other infrastructure investors.“The federal government has now moved from considering airport privatization to committing to it,” lawyers from McCarthy Tetrault wrote in a bulletin published the day after Carney’s speech. “This marks a decisive step beyond the incremental, exploratory posture of earlier announcements, each of which stopped short of a firm commitment and was expressly characterized as being in its ‘early stages.’”The prime minister said Tuesday that Canadian pension funds were “very interested” and that bringing private capital into the airports could improve passenger service and make their operations more efficient.Canadian pensions were in active discussions with the government about potentially investing in the airports, La Caisse chief executive Charles Emond said in June. Those funds are already major investors in such assets overseas — La Caisse, for example, held a significant stake in London’s Heathrow for nearly two decades. But they have been unable to make similar investments at home because large Canadian airports are generally operated by not-for-profit authorities on government-owned land.It’s not yet clear what terms the government is willing to give — such as the length of the concessions — or how the existing not-for-profit airport authorities would fit into the new structure.The potential bidder pool may extend well beyond Canadian investors. Carney has said the concessions will be awarded through a competitive process, while Transport Minister Steven MacKinnon told the Toronto Star that while the government is open to foreign investors, and he expects “very solid, if not majority, Canadian participation.”Still, the plan is likely to face political and public scrutiny. A Nanos Research Group survey conducted for Bloomberg News in June found 53% of respondents opposed or somewhat opposed to opening airports to private investors.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.