London City Airport Owners Pick Advisers On Sale

London City Airport's owners have picked Credit Suisse to advise them on a potential sale that could value the business at up to GBP£2 billion (USD$3.1 billion), two people close to the deal said.

City Airport, popular among executives for its convenient location near London's two financial districts, could be sold as soon as this year, said the people, who could not be named because the matter is confidential.

The airport is majority-owned by Global Infrastructure Partners (GIP), an investment fund that also backs London Gatwick and Edinburgh airports.

GIP bought City Airport for GBP£742 million in 2006 and holds 75 percent. Oaktree Capital Management holds the rest.

Both owners have agreed to the disposal and held talks with investment banks in recent weeks to appoint advisers, the sources said.

The business is expected to draw interest from infrastructure funds, industry sources said, noting that other airport operators are also possible buyers.

Infrastructure assets have attracted high valuations because of their stable returns and long-term growth prospects; attributes that have helped to increase activity in the sector.

France approved the sale of Lyon and Nice airports this year, having last year sold half of Toulouse Blagnac airport to a Chinese-led consortium..

City Airport, located about three miles from the Canary Wharf financial district to the east of the city, catered for about 3.6 million passengers last year. It aims to serve 6 million a year by 2023.

The airport had core earnings (EBITDA) of GBP£45.8 million in 2014, up 9.3 percent on 2013. One issue for any buyer is that London mayor Boris Johnson in March rejected a GBP£200 million expansion plan over noise concerns.