World's biggest airport operator AENA jumps in market debut

Shares in the world's biggest airport operator, Spain's AENA, took off in their stock market debut Wednesday, a fresh sign of a recovery in investor appetite for Spanish assets as the nation returns to growth.

Shares in the state-owned firm jumped by nearly 16 percent to 67.11 euros minutes after noon, when AENA executive chairman Jose Manuel Vargas rang the bell, to kick off Europe's largest initial public offering since 2011 according to analysts at Link Securities.

"The company generates very strong investor interest," he said at the Madrid stock exchange.

It is the first major listing in Spain since lender Bankia's troubled flotation in 2011 which ended with the bank needing a massive bailout from the central government and the European Union.

But since then the Spanish economy, the eurozone's fourth largest, has rebounded with growth of 1.4 percent in 2014 after five years of recession or stagnation following the collapse of a building boom in 2008, and investors have returned to the country.

Mexican billionaire Carlos Slim last year became the biggest shareholder in Spanish infrastructure group FCC in one of the most high profile signs of the improved investor sentiment for Spain.

Strong investor interest allowed AENA on Tuesday to set the price for its shares in the flotation at the very top of the range of the 53-58 euros per share, which valued the firm at 8.7 billion euros ($9.8 billion).

The company runs 46 airports and two heliports in Spain and another 15 in Latin America, the United States and Europe, including London's Luton.

It handled nearly 196 million passengers last year, a 4.5 percent increase over 2013, making it the world's biggest airport operator by passenger numbers.

- Return to growth -

Hit hard by Spain's economic downturn, the operator underwent a massive overhaul which included cutting jobs and hiking airport fees that have helped restore it back to financial health.

The company reported a net profit of 596.7 million euros ($689.1 million) for 2013, emerging from a net loss of 63.5 million euros the previous year.

Results for 2014 are not yet available, but AENA said its revenues rose 6.4 percent during the first nine months to 2.39 billion euros thanks to a rise in airport traffic as Spain's economy picked up and stronger sales from duty free shops.

Spain, which is privatising the company, has a public debt load expected to surpass 100 percent of gross domestic product this year. It plans to keep a 51 percent controlling stake in the firm.

AENA fixed the size of the offering at 44.55 percent of its capital, an amount that can be raised to 49 percent if an over-allotment option is exercised, which would raise over four billion euros for the state.

"AENA will continue to be a public firm," Public Works Minister Ana Pastor said on the eve of the listing.

In January 2012 Spain's new conservative government shelved plans to partially privatise AENA until November 2014 due to tepid investor interest.

The original initial price offering plan set a price range of between 41.50-53.30 euros a share but it was lifted twice since due to the company improved results.

The Spanish government had envisaged the sale of 21 percent of the operator's shares to three anchor investors -- British hedge fund TCI, Spanish infrastructure group Ferrovial and Spanish fund Grupo Alba.

But the three firms had offered a lower price and the increase in AENA's valuation edged the first two out of the operation.

TCI and billionaire financier George Soros bought shares in the flotation, according to Spanish business daily Expansion.

The majority of the offer, 95 percent, is reserved for institutional investors with the rest set aside for retail investors.