Sunderland City Council set for share of £43m Newcastle Airport windfall

Newcastle International Airport Ltd has negotiated a new term loan facility of �233million.
Newcastle International Airport Ltd has negotiated a new term loan facility of �233million.
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Sunderland City Council is set for a share of a £43m windfall as part of Newcastle Airport refinancing plans.

The council is among seven local authorities which hold a 51% stake in Newcastle International Airport Ltd.

The completion of the refinancing is great news for the region

Coun Iain Malcolm

Also included is Durham County Council.

The other 49% is owned by global investment manager AMP Capital, with a total dividend of £43million to be split between the shareholders.

The dividend will be split in accordance with the shareholders’ holdings, meaning the councils are expected to share about £22m.

It is part of plans from the airport to refinance its bank debt.

Newcastle International Airport Ltd has negotiated a new term loan facility of £233million, with the airport’s overall amount of loan interest paid to be reduced.

The leader of South Tyneside Council, Coun Iain Malcolm, has described it is “great news for the region”.

Coun Malcolm, who is also chair of the LA7 Airport Holding Company, said: “The completion of the refinancing is great news for the region.

“The airport has grown to become a very significant asset for the North East, contributing hugely to the economy, and providing the links that people and businesses need.”

The refinancing has been agreed well in advance of the expiry of the previous financing arrangements, which were arranged in 2012.

Since then, the airport has committed about £40million in capital developments, such as radar replacement and improvements to customer facilities and its retail offering.

The new facility will result in the airport paying a lower amount of interest each year after more favourable interest rate terms were negotiated.

The loan is split into tranches between seven and 20 years, which will offer enhanced protection against future interest rate rises and ensure continued investment to improve customer facilities and infrastructure, including a planned runway resurfacing.

Nick Jones, interim chief executive of Newcastle International, said: “We are pleased to announce that our refinancing project has been completed.

“We have created a platform which allows the airport to continue to deliver the facilities, infrastructure and connectivity that the North East needs.

“The project will help secure the long term success of the airport by maintaining its sound financial footing and provides a new capital expenditure facility, which is available to support our growth plans.”