Sydney Airport has confirmed that it will buy out the minority shareholders in the country's largest airport, in a $1.2 billion deal that will finally simplify its complex ownership structure.
Ending weeks of speculation, Sydney Airport chief executive Kerrie Mather said the listed entity had agreed to buy the remaining 15.2 per cent it did not already own.
The minority shareholders include the Future Fund, Australian superannuation funds MTAA Super and UniSuper, and foreign interests including Canadian pension fund PSP investments.
The airport has also revealed that it will also make a tax and interest payment of $69 million. It follows an in-principle agreement with the Tax Office to settle concerns about the deductibility of distributions paid on its redeemable preference shares.
Sydney Airport has been placed in a trading halt until the market opens on Thursday morning to allow for a capital raising by way of an institutional book-build.
It will result in the airport making a placement of about 86 million securities to institutional investors.
The money raised will be used to pay cash to those minority shareholders with a combined stake of about 4 per cent who want to sell out.
The airport will issue 247 million securities to those minority shareholders who intent to retain their interests in the airport. It means that they will swap unlisted airport shares for the listed entity's securities.
Ms Mather said the deal had been structured to ensure the listed company's existing shareholders did not face a dilution of their stakes.
The airport said the proposed new structure would allow the level of foreign ownership in the listed entity to increase from 40 to 49 per cent.
The Future Fund's head of infrastructure, Raphael Arndt, said in a statement that Sydney Airport remained attractive to the fund because of its high level of earnings certainty, protection against inflation and correlation with strong economic growth.