Changi Airports International, Basic Element, and Sberbank sign Memorandum of Understanding
31-Oct-2011 Changi Airports International (CAI), Basic Element Group, and LLC Sberbank Investments, a subsidiary of Sberbank, have signed a memorandum of understanding (MOU) to form a joint venture to invest in and develop airports in Russia.
CAI will hold 30%, Basic Element will hold 50% plus one share, and LLC Sberbank Investments will hold 20% minus one share in the joint venture.
Basic Element currently owns a cluster of airports in the Krasnodar region, including Sochi and Krasnodar, with total passenger traffic expected to exceed 5 million passengers per annum in 2011. Krasnodar region is an established domestic tourism destination and an important agro-industrial centre of Russia. The region will be hosting Winter Olympics-2014, F1 starting from 2015 and FIFA World Cup in 2018.
The purpose of the joint enterprise is to further develop these airports in the Krasnodar region, to improve levels of service to meet international standards, increase capitalization of the assets and also to expand the portfolio of airport assets.
The creation of the joint venture is targeted to be completed in the second quarter of 2012. It is subject to due diligence and final negotiations between the parties and approval by the regulatory authorities.
Mr Lim Liang Song, CEO of CAI said: "We are delighted with the partnership with Basic Element and Sberbank. The Russian market holds enormous potential. We look forward to a strong partnership to develop the airports in the Krasnodar region. Changi Airports International brings extensive experience in managing and consulting for airports overseas. In addition, it hopes to transfer the experience and expertise of Changi Airport Group in managing Changi Airport to this joint venture."
Mr Oleg Deripaska, CEO of Basic Element, said: "The signing of this MOU is an important strategic step in the development of Basic Element's airport business and is linked with our plan to increase the capitalization of our businesses by attracting partners that share our strategic views on the estimation of asset potential and development. We welcome this partnership with Sberbank and Changi Airports International."
Mr German Gref, President and Board Chairman of Sberbank, said: "The participation of Sberbank in this newly created joint venture is part of our investment strategy, which is based on the acquisition of assets with strong prospects for growth. We see great potential for value increase in Krasnodar region airports, especially in view of the upcoming 2014 Olympic Games in Sochi, as well as the World Cup that Russia will be hosting in 2018."