Aecon announced today [March 16] that it has “achieved commercial and financial close” on the airport redevelopment project in Bermuda, with the announcement saying “CCC will fully subcontract the work to Aecon, a construction contract valued at US$274 million” and “construction of the new terminal will begin shortly and is scheduled to be completed in 40 months.”
Aecon Announce Commercial And Financial Close
The announcement, which was posted today on Aecon’s website, said, “Aecon Group Inc. announced today that it has achieved commercial and financial close on the L.F. Wade International Airport Redevelopment Project in Bermuda [Bermuda Airport Project].
“The Bermuda Airport Project is being implemented under a framework agreement between the Government of Bermuda and the Canadian Commercial Corporation [CCC], a Crown corporation of the Government of Canada.
“Commercially, the project is being delivered under a Public-Private Partnership [P3] business model. Aecon, as the private sector partner, is responsible for the project’s development, financing and long-term operation and maintenance.
“Under the agreement, CCC will deliver a world-class new airport terminal and associated infrastructure under a fixed price, date guaranteed design and construction contract. CCC will fully subcontract the work to Aecon, a construction contract valued at US$274 million.
Construction “Will Begin Shortly”
“Construction of the new terminal will begin shortly and is scheduled to be completed in 40 months. The new works are being constructed on the airport property well removed from the existing terminal, allowing for uninterrupted operations of the existing terminal,” Aecon said.
“In addition to its construction mandate, Aecon’s Concessions segment led the development and financing of the project. On financial close, Bermuda Skyport Corporation Limited [Skyport], a special purpose company formed and initially wholly-owned by Aecon Concessions, will take over the airport’s operations, maintenance and commercial functions, and manage and coordinate the overall delivery of the redevelopment project over a 30-year concession term.
Financing For The Project
“Financing for the project has been arranged by Aecon, and includes a US$285 million fixed coupon US private placement, amortized over a 25-year term, and approximately US$70 million of shareholder equity to be contributed in the latter part of construction,” the company said.
“Advisors to Aecon on the project include UBS Investment Bank as financial advisor, McCarthy Tétrault as legal advisor and Mott MacDonald as the project’s technical and traffic advisor.
“The construction activities of the Bermuda Airport Project will be recorded in Aecon’s Infrastructure segment, while the financing, operations, maintenance and concession activities will be recorded in Aecon’s Concessions segment.
“Through Aecon’s select participation in international projects such as the Bermuda Airport Redevelopment Project, we continue our long history of developing and building airports globally and add to our successful roster of experience as concessionaire,” said John M. Beck, President and CEO, Aecon Group Inc.
“The combination of the Government-to-Government and P3 procurement models is a unique offering brought to the table by CCC and Aecon to facilitate the delivery of a tailor made solution for Bermuda.”
“We are very pleased to see the project move forward and are confident it will bring substantial value to both Bermuda and Aecon. Working with the Canadian Commercial Corporation and the Government of Bermuda, Aecon will meet the set objectives – delivering a world-class airport, as well as providing significant economic benefits to Bermuda,” said Steve Nackan, President, Aecon Concessions.
“As Bermuda’s largest infrastructure project, swift financial close on this innovative arrangement demonstrates the quality of the project, as well as Aecon’s depth of experience and track record in delivering projects around the globe.
“Aecon’s role as developer, investor, design-builder and operator highlights Aecon’s turnkey service offering and integrated business model – developed to meet the needs of our valued clients.”
“This government-to-government project embodies the value, trust and collaboration of the long-standing bilateral relationship between Canada and Bermuda,” said Martin Zablocki, President and CEO of the Canadian Commercial Corporation.
“Knowing the positive economic impact a modernized airport can have on Bermuda, CCC is excited to play a key role in the delivery of a world-class, customized solution to meet the needs of Bermudians – for both today, and generations to come.”
Finance Minister Bob Richards Comments
“Bermuda is benefitting from a series of strategic initiatives to spur growth and prosperity,” said Deputy Premier and Minister of Finance Bob Richards, according to the statement on Aecon’s website.
“This transaction is one of them, but a very significant one that brings jobs for Bermudians and the knowledge that they are participating in one of the largest, and most important, infrastructure projects of our generation. This development helps our community to continue along a path of economic growth and prosperity.
“The benefits of this significant infrastructure project will be appreciated by Bermudians and visitors for many years to come. We look forward to a long, and mutually beneficial, relationship with our first-class partners.”
“The Bermuda Airport Project will deliver a larger, state-of-the-art, accessible terminal that can resist hurricane-force winds. It will improve passenger flow, introduce new and renovated facilities, and provide additional retail offerings to better meet the needs of airport users, today and in the future.
“Key features of the project in addition to the new terminal include providing six new covered boarding bridges, new apron space for parking and refuelling or loading/unloading aircraft; modifications to taxiways to improve aircraft traffic flow; as well as energy and water efficiency features.”