August 30, 2005

Aecon finishes financing Ecuador airport

PATRICIA WILLIAMS

staff writer

Construction of an estimated $415 million (US) airport in Ecuador moved a step closer to reality with the recent signing of financing documents by Aecon Group Inc., its concession partners and project lenders.

The documents detail the terms and conditions of the financial structure in place for development of the new Quito International Airport. Aecon said the signing is an important step for the long-awaited project.

The transaction sets the stage for financial close, the flowing of funds and the start of construction, the publicly traded construction and infrastructure development company said.

A construction start will take place upon satisfaction of certain final conditions, expected in the fourth quarter of this year.

John Beck, Aecon chairman and chief executive officer, said the project represents “an excellent opportunity” for his company which is acting as a developer and concessionaire.

It will build the airport in joint venture with a Brazilian construction company.

“In addition to the construction profits we expect to earn, our role as a developer provides significant value-added, making the Quito Airport an annuity-type asset similar to our interest in the Cross Israel Highway.”

The project has been in the works since 2002 when Corporacion Quiport S.A. was awarded a concession by the city of Quito to design, build, finance and operate the new airport to serve the city, Ecuador’s capital.

Aecon has a 45.5 per cent interest in the concession through its stake in Quiport, which has been operating the existing airport since November 2002 and will continue to do so until the new airport is complete.

The new facility will be constructed under a 51-month, fixed-price engineer/procure/construct contract signed between the city of Quito and the Canadian Commercial Corp., a Crown agency.

The agency in turn will subcontract 100 per cent of the estimated $415 million (US) in construction to a 50-50 joint venture of Aecon and Andrade Gutierrez Constructores, one of Brazil’s largest construction companies.

The project team includes principal consultants Marshall Macklin Monaghan Ltd. of Toronto, which introduced Aecon to the project.

Bill Pearson, Aecon Group’s CEO of infrastructure development, said the signing of the financing documents was the result “of four years of hard work, not just by Aecon but also by its partners in the project.”

The project’s senior lenders include Canada’s Export Development Corp.

Demand for airport services in Quito has been growing steadily over the years. The existing downtown airport does not have the capability of accommodating the current traffic of more than 3 million passengers per year.

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