North Queensland Airports taps Gresham for lender talks

An aerial view of Cairns Airport. Picture: Brendan Radke

The owner of Cairns and Mackay airports is understood to have hired advisory firm Gresham to assist in negotiations with its lenders, with the airport’s revenue under pressure from COVID-19 travel restrictions.

The understanding is that Gresham’s role centres on whether the asset, which is considered to be effectively closed for business, needs to seek additional funds, and whether these funds would involve debt or equity.

Should it not find the support it needs from the banks, it will probably require an additional equity investment from its existing shareholders.

The Cairns and Mackay airports, owned by North Queensland Airports, are thought to be the hardest hit when it comes to airports affected by the COVID-19 travel restrictions.

Compounding matters has been the collapse of the country’s second-largest carrier, Virgin Australia, which flew to many tourist destinations such as Mackay and Cairns.

Already, airport owners are forgoing dividend payments from the assets that are currently reeling from a lack of air traffic.

JPMorgan Asset Management owns 66 per cent of North Queensland Airports, while other owners include The Infrastructure Fund, managed by Macquarie, and the Perron Group.

Other owners of airports in Australia are infrastructure investors including AMP Capital, Queensland Investment Corporation and Macquarie Infrastructure and Real Assets.

Larger airport assets are thought to be in a better position.

The listed Auckland International Airport raised $NZ1.2bn ($1.1bn) in recent weeks to tide it over until the end of next year. The raise was well supported.

Although an equity raising has not been ruled out for Sydney Airport, experts place it in a different category to the Auckland airport, with a need for additional funds not as pressing.