Ataturk Airport lease contract

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In June 2005, the Turkish State Airport Authority (DHMI) granted a 16-year lease contract to TAV Havalimalary Isletme A.S. to operate Ataturk Airport in Istanbul. The airport operations included international and domestic terminals, the multistory car park, and the general aviation terminal at the Istanbul Ataturk Airport, Turkey. TAV Havalimalary Isletme A.S, previously known as TAV HI, was established in 1997 by Tepe Construction (47.5%), Akfen Construction (47.5%) and Airport Consultants Vienna (5%). The company was created to implement a seven year build-operate-transfer (BOT) for Ataturk’s New International Terminal and multi-storey car park. When the BOT contract period ended in 2004, the terminal ownership and operation was transferred to the government as initially agreed. The lease contract was granted to TAV Havalimalary Isletme A.S. through a competitive tender in which the bidding criteria was the highest lease fee. TAV Havalimalary Isletme A.S won the tender by offering US$2.543 billion in lease/concession fees. Two other consortia submitted financial bids. The transaction was one of the largest Turkish privatization in 2005. Under the contract, TAV had to pay DHMI a total amount of $2.543 billion plus value added tax (VAT) in installments: a) 2.5% of the aggregate lease payment was payable on the date of the execution of the lease agreement; b) 5% of the aggregate lease payment was payable within five business days following 3 July 2005; c) 15.5% of the aggregate lease payment was payable within 180 days following 3 July 2005 (i.e. by 30 December 2005); and d) 5.5% of the aggregate lease payment was payable within five business days of the beginning of each subsequent operation year, starting with the operation year commencing on 3 January of each lease year. The final lease payment is scheduled to be made within five business days of 3 January 2020. The lease payments from 2006 onwards (around $140 million plus VAT per year) would be paid by revenues generated by TAV. But the lease payments for in 2005 ($690 million) had to be financed. The project received US $715 million finance in December 2005 securing lease payments for 2005. The $715 million financing comprises a $660 million commercial facility, $15 million in working capital and a $40 million mezzanine facility. http://www.ataturkairport.com/eng/index.php http://www.ataturkairport.com/eng/6_f.php?id=151 None