Wednesday 7 November 2012

China Investment Corporation buys 10% London Heathrow Stake.

Sky Watch Nigeria.

Sovereign wealth fund CIC (China Investment Corporation) has purchased 10 per cent of Heathrow Airport Holdings - the current owner of London Heathrow Airport and four other UK airport sites.

CIC's Heathrow stake acquisition represents one part of a wider foreign investment scheme and a move set to increase China's UK infrastructure investments as a whole. Previously, the same organisation purchased 8.68 per cent of Thames Water and, now, it's paying £450 million for 10 per cent of the former BAA Ltd, now known as Heathrow Airport Holdings Ltd.

Besides Heathrow Airport itself, Heathrow Airport Holdings Ltd also owns Glasgow, Southampton, Aberdeen and Stansted airports. At its peak, BAA was the owner of seven UK airports but, in recent months, it's made two major sales, with both Gatwick and Edinburgh airports purchased by Global Infrastructure Partners.
Chinese Heathrow Stake

The Chinese Heathrow stake purchase comes as the UK and China are forging deeply-rooted corporate connections, while other nations watch on in apparent part-disbelief.

"It is fair to say that the UK has a more open relationship with China than many other major economies", pension fund manager Stephen Joske from Australia Super told the BBC. "There is certainly push all around the world for scrutiny of Chinese investment - it has been ringing alarm bells.

"It is unfair to an extent, as these deals are a win-win transaction. Politics has been overshadowing economics."

China Investment Corporation was formed in 2007 and now manages an estimated $400+bn in assets. It's one of the world's major state-owned investment funds - presently only four other nations have operational sovereign wealth funds with higher values.

It's not the first overseas organisation to invest in London Heathrow Airport's management firm either since, two months ago, Qatar Holdings obtained a 20 per cent share. However, this deal's still not yet been approved by European regulatory bodies.


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