UPDATE 1-Portugal to beat asset sale goal with Vinci's ANA buy

Thu Dec 27, 2012 8:10am EST

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By Sophie Sassard and Sergio Goncalves

LONDON/LISBON Dec 27 (Reuters) - Portugal is set to beat its privatisation revenue goal by selling airport operator ANA to French construction firm Vinci in a deal worth about 3 billion euros ($3.97 billion), sources said.

Vinci was chosen because of the high value of its bid for ANA compared with the other three final contenders, Fraport of Germany, Zurich airport operator Flughafen and Argentinian infrastructure group Corporacion America, people with knowledge of the matter told Reuters on Thursday.

Lisbon is under pressure to get the most it can from state-owned asset sales after it agreed to raise 5.5 billion euros by the end of 2013 as part of a 78 billion euro bailout agreement with the troika of EU/IMF lenders, which also included across-the-board tax hikes and spending cuts.

"The Vinci offer is so high that it was placed at the top of the list for the cabinet to evaluate. The preliminary evaluation was to recommend Vinci, for its financial bid and overall parameters. But the decision is with the cabinet," one of the people said.

Portuguese government officials said the cabinet was still in a meeting and had no immediate comment.

Lisbon has been betting on infrastructure deals to cut its debt as demand for regulated assets in Europe remains strong despite the region's debt crisis.

It has so far sold stakes in power companies EDP and REN, mainly to Chinese investors.

Vinci has made no secret of its eagerness to build its fledgling airport concessions business. It is trying to rebound from the loss earlier this year of a bidding contest for Turkish airports operator TAV as well as a decision by Germany's Hochtief to suspend a planned sale of its airports.

ANA posted record profit last year of 76.5 million euros and revenue of 425 million, despite the country's economic crisis, as the number of foreign visitors rose.

More than three fifths of revenue comes from domestic and intra-European flights and Portugal hopes the potential for growth in long-haul flights to South America and Africa, which could generate high fees for ANA, will appeal to investors.

Potential buyers also see the prospect of increasing profits by running ANA more efficiently and developing non-aviation revenue such as from duty free sales and parking fees, people close to the transaction said.

Vinci declined to comment. ($1 = 0.7563 euros) (Reporting by Sophie Sassard in London and Sergio Goncalves in Lisbon; Additional reporting by James Regan in Paris; Editing by Erica Billingham and Helen Massy-Beresford)

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