China’s ICBC, Turkey’s Largest Airport In Talks for Refinancing

The operator of Istanbul’s giant new airport is in talks with Chinese banks led by Industrial & Commercial Bank of China Ltd. to refinance 5.7 billion euros ($6.2 billion) of existing loans.

IGA, as the company is known, said it’s seeking to complete a deal in the first half, citing strong interest from China and the Middle East Gulf without naming any institution.

Around half of the new borrowing could come from Chinese banks led by ICBC, while some banks on the original loans may also participate, said a person familiar with the matter, asking not to be identified because the talks are private. Beijing-based press officer at ICBC declined to comment.

The company wants to take advantage of its strong cash flows and decreasing construction costs to lower financing costs. European banks are also showing interest, IGA said.

The company said in November it’s working with London-based Dome Group Financial Services on the deal. The refinancing will help IGA cut its annual interest burden “significantly,” it said at the time. Dome Group declined to comment.

The operator got the original funding to build the airport from TC Ziraat Bankasi AS, Turkiye Halk Bankasi AS, Turkiye Vakiflar Bankasi TAO, Denizbank AS, QNB Finansbank AS and Turkiye Garanti Bankasi AS in 2015 and 2018. Both loans mature in 2031, according to data compiled by Bloomberg.

IGA has to pay a total 22.1 billion euros, or 1.1 billion euros a year, for the 25-year contract to operate the airport, with annual lease payments of 1.1 billion euros starting this year. The company will make an extra payment of 22.4 million euros to the government after proceeds from international passengers exceeded state guarantees during the first nine months of operations in 2019, IGA said last month.