Aecon Announce ‘Commercial & Financial Close’

March 16, 2017

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.

Aecon Comments

“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.”

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Comments (30)

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  1. Bob de Builder says:

    Great news. Now get those shovels in the ground and let the employment of Bermudians begin.

    • So Silly says:

      Great news, that’s why our taxes are going up. To pay for this company to make a killing on our Asset.

      OBA – Selling Bermuda out, one deal at a time!

      • Curious says:

        What is hard about this?

        The PLP sold out the ENTIRE COUNTRY’S finances by going on a debt fueled spending rampage with little tangible return.

        We pay $186m PER YEAR to foreign debtors.

        You are complaining that we have sold out our airport, which has an upside revenue of ~$30m per year.

        $186m > $30m

        Just sayin

      • Onion says:

        lol, no.

        Your taxes are going up because the government has to pay the interest costs of the debt and deficits created by the PLP.

        ~$180 million a year in debt service out of the country or ~$1.8 billion a decade. All directly attributable to the PLP and the biggest complaint you can make about the OBA is that they didn’t fix it quickly enough.

      • sandgrownan says:

        The reason your taxes are going up is because there’s no money to pay down the debt and the overstuffed (and largely useless) civil service.

        So no, you’re wrong.

      • Jus' Wonderin' says:

        No, taxes are going up because OBA has to payoff the debt somehow…

      • bdaboy says:

        “that’s why our taxes are going up. ”

        of course, taxes aren’t rising to pay off the $billions in debt that the PLP left us with.

      • trump supporter says:

        Just think if we had all the money from all those so called overruns, taxes probably wouldn’t need to go up as much!

      • Politricks says:

        If you think this is why our taxes are going up, then you truly don’t have a clue.

        Want to see why, check out the COI findings to see how our monies were ‘mismanaged’ and contributed to the national deficit and by extension debt. Then check out to see the cost of the civil services.

        Then check out the loss of our population since 2007/8 which decreased our tax base.

      • Bermyman says:

        This point of view is scary as it shows the lack of understanding that has led to so many issues in Bermuda. Taxes go up to service Debt which the majority of is to keep civil service jobs. The airport on the other hand is a $250m inward investment into Bermuda.

    • What?? says:

      I’m curious as to how many construction jobs you think this will create?

  2. Encyclopedia says:

    Another no-bid, no RFP deal, that will be probed in future.

    Political parties are willingly going this no RFP route knowing fully well that they will somehow deal with/manage the fallout later.

    • Onion says:

      It has already been probed and no evidence of criminality was found. There have also been several independent reviews which have independently found that this represents the best value for money.

      There are no parallels between the no-bid scandals of the past.

    • sandgrownan says:

      Have you read nothing on this?

    • Micro says:

      It already has been probed extensively.

    • Politricks says:

      Already reviewed by the COI with no criminal activity identified.

      Also, reviewed by the UK Government, Deloitte and the Blue Panel Ribbon.

      Sorry, but this isn’t a PLP project.

  3. bdaboy says:

    “Another no-bid, no RFP deal,”

    Please list the local companies that have, or have access to, the funds required to build this airport.

    Or, is your post yet another post revealing that the writer truly doesn’t understand anything about the airport deal, and is neither interested nor capable of comprehending such a deal.

    • What?? says:

      Of the total money for this project only $70 million is equity. Of that equity, Aecon is only contributing $29 million. In contrast, $100 million of the money over the 3 1/2 years of construction will come from airport revenue. With the minimum revenue guarantee there is zero risk for the equity and bond holders. I’m sure a Bermudian company, or a consortium of Bermudians, could have raised the money given this guarantee.

  4. Joe Bloggs says:

    “contract valued at US$274 million”

    Umm, I am pretty sure I heard David Burt say yesterday that it was a $2 BILLION project.

    Which is it please?

    • Cranberry says:

      Burt never exaggerates – so its probably $300000000000000000000000.99 Billion (at least)…

    • Build a Better Bermuda says:

      Burt mathematics theorem states that you do not include expenditure, profit sharing or any other valuation that would decrease the possible revenue stream figure, in order to maximize politrick effect.

  5. 297Warriors says:

    Can’t wait to see the new cost that is going to be passed on to the users of the Airport!

    Uncle Bob has sold out Bermuda to Canada which they don’t give a fly _ _ _ _ of the average….

    Watch how it all unfolds and watch all the people who was for this deal be crying foul!

    • What?? says:

      It will now cost you, directly, over $100 per person each time you use the airport.

      • Joe Bloggs says:

        What is your source for that please?

        That is something that should be in the public domain and may lead to public outrage if true.

        • What?? says:

          It is true and is in the public domain. See Page 10 of the “Overview of the Airport
          Redevelopment Transaction for
          Members of Parliament” (it’s available as a pdf – just do a search). A little late to start worrying about the details now isn’t it? Everytime this sort of thing was pointed out the messenger would be called a liar.

  6. Navin Johnson says:

    The good old PLP has handcuffed Bermuda for generations..hopefully they will be brought to justice

  7. trump supporter says:

    Bloggers be out shortly!


  8. sad day says:

    we sold our biggest revenue to a foreign country. well done for …. politics! I don’t like either party and both screwed us over. do people just forget that we have been threatened by airlines to leave our country due to high taxes and the new airports about to raise them… how much will our maintenance cost be for this once the company leaves? I bet its more than we can afford… so we will sell the airport again for 30years to keep this one… well done government! hope a independent wins the next election (hopefully with a economics degree) that actually will help this country.

    • Joe Bloggs says:

      “we sold our biggest revenue [earner] to a foreign country”

      Umm, when were the Hamilton Docks sold and why am I only hearing this now?