U.S. CONSORTIUM TO BUY DOMINICAN AIRPORT

C O N F I D E N T I A L SANTO DOMINGO 000141 SIPDIS SIPDIS DEPT FOR WHA/CBA E.O. 12958: DECL: 01/24/2018 TAGS: ECON EAIR EINV DR SUBJECT: U.S. CONSORTIUM TO BUY DOMINICAN AIRPORT MANAGEMENT CONCESSION Classified By: Danial Bellegarde for reason 1.4 b ¶1. (C) The operations manager for Aerodom (Dominican Airports International 21st Century),which manages the airport operations concessions for six of the Dominican Republic's eight international airports, including Las Americas International Airport in Santo Domingo, confidentially informed ECONOFF that a deal has been agreed to with an unidentified U.S. private equity company to purchase a majority shareholding in the company. The operations manager, Andrew O'Brian, is employed by Canada's Vancouver Airport Authority, which manages over 21 airports worldwide and is a minority shareholder in the concession holding. Aerodom has leveraged World Bank International Finance Corporation financing for modernization projects and is currently operating with an excellent balance sheet. The deal is expected to be announced as early as next month, but is still pending the purchaser's accessing of third party financing, likely through U.S. financial institutions such as Citigroup or ING's Investment Management Americas according to O'Brian. The prime shareholder and president of the company is Abraham Hazouri, a wealthy Dominican businessman. The deal is expected to be worth several multiples of the company's current annual revenues of approximately $70 million, but the final settlement amount was not disclosed. ¶2. (C) Comment: If the deal goes through, which O'Brian believes is 90 percent certain, it will represent a significant U.S. investment in the Dominican Republic. Aerodom, under the management of Vancouver Airport Authority, has been credited with putting into place significant infrastructure developments (e.g., remodeling Las Americas Airport and opening a new airport in the Samana penisula) as well as more accountable proceedures and facilities for the processing of passengers through customs and immigration. Approximately 500,000 American citizens transit the six airports under Aerodom's control on an annual basis. Aerodom has also been a key partner of the Dominican Airport Security Agency, known as CESA, as well as the U.S. Transportation Security Administration, in bolstering security protocols in line with International Civil Aviation Organization standards. The presence of a large U.S. investor is likely to add additional weight to these efforts as well as continuity of service as Vancouver Airport Authority is expected to maintain its role as the management operator. End comment. FANNIN