Chinese firm buys out company building new airport terminal in BermudaSaturday, October 28, 2017
HAMILTON, Bermuda (CMC) — Aecon, the Canadian construction company building Bermuda's controversial new airport terminal, is to be sold to a Chinese firm, but officials said it would be “business as usual” with the redevelopment project.
CCCC International Holding (CCCCI), a subsidiary of China Communications Construction Co, will buy Aecon for US$1.5 billion, or US$20.37 per share, in an all-cash deal, it was announced here on Thursday.
Aecon is the prime contractor on the airport project, under a 30-year public-private partnership (PPP) involving the Bermuda Government and the Canadian Commercial Corporation.
Aecon said in August that it had hired advisers to help it find a buyer.
The sale announcement comes in the wake of Transport Minister Walter Roban saying earlier in the week that the airport deal is under review by an international firm of consultants.
The review was ordered by the new Progressive Labour Party (PLP) Government and is being carried out by the Bermuda Airport Authority and US-based global consultants LeighFisher.
The PPP agreement to build the new airport terminal, signed by the former One Bermuda Alliance (OBA) Administration with the Canadian Commercial Corporation and its contractor, Aecon, came under fire from the PLP while in Opposition.
But former Premier Michael Dunkley said earlier this week that the OBA plan was “the best deal for Bermuda” and accused the PLP of resorting to “Trump-like” misinformation.
Work on the US$302-million terminal began in April and is due to be completed by 2020.
Roban said the assessment of the agreement started just after the PLP came to power when it thrashed the OBA in July's general election, with LeighFisher contracted four to six weeks ago.
He could not provide a figure for the potential cost of scrapping the deal, saying that would be “hypothetical” until the review was finished.
Steve Nackan, president of Aecon and chairman of Skyport, the company overseeing operations at LF Wade International Airport, said nothing would change regarding its Bermuda work after the Chinese takeover.
“We wish to confirm our steadfast commitment to Bermuda and the airport redevelopment project. It is business as usual at Aecon and on the Bermuda airport terminal construction project.
“This agreement will create value for our shareholders and enhance Aecon's capabilities and growth potential, something that we're very excited about. By joining the third-largest construction company in the world, Aecon and Skyport will ultimately benefit from enhanced capabilities and financial resources. However, Aecon will remain a Canadian company,” he said.
Nackan said that the sale will have no impact on the day to day of construction of the new airport terminal or Skyport.
“The Aecon management team and friendly Bermudian Skyport employees will remain in place and the new airport will be completed on time and on budget with the guarantee of the Canadian Commercial Corporation. We look forward to delivering a state-of-the-art terminal in 2020.”
CCCCI President Lu Jianzhong said this is an excellent fit for both companies.
“Aecon has a strong management team and a very impressive track record that have made it a leading construction company in Canada and a pioneer in public-private partnerships and concession operations.
“It will now gain access to significant capital, complementary infrastructure expertise, and an international network to support its growth ambitions,” he added.
The deal was struck in 2014 by the then OBA Government, but the start of the project was hit by a number of delays, including a protest outside the House of Assembly last December.
The protest, in which police in riot gear used pepper spray to help disperse the demonstrators, forced then Speaker of the House Randy Horton to adjourn parliament until February, when the project was eventually approved by parliament.