Liverpool refuses to back airport investments
The city council will not participate in a capital call to fund a pair of projects at Liverpool John Lennon Airport, claiming that contributing to a cash raise is not in line with its divestment strategy.
Liverpool City Council owns a 10% stake in the airport while Peel L&P and Ancala each own 45%.
The majority shareholders wish to raise £7m to fund two projects:
- Taking over and upgrading an existing fuel farm previously operated by Shell
Peel and Ancala plan to raise the cash needed for the project through an issuance of new shares priced at a discounted rate of £1 per share.
As a 10% stakeholder, the city council is obliged to contribute 10% of the cost, equating to £700,000.
However, Liverpool’s cabinet is expected to vote not to participate in the capital raise next week as it is not in line with the authority’s long-term strategy, which is to dispose of its stake at best value, according to a cabinet report.
Not participating in the capital raise will see the council’s ownership share effectively diluted from 10% down to 5.6%, according to a council report.
In addition, the report stated that if the council does not participate, then the notional value of its position would be impaired by 31% or £900,000.
The council ultimately wants to dispose of its stake, citing environmental concerns and the council’s need for capital receipts. Having an ownership stake in the airport is also not considered a “strategic priority for the council”, according to the report.
Alongside Peel, Liverpool City Council helped to recapitalise the airport when it became overleveraged and ran into financial difficulties in 2015.
The council invested £2m for a 20% share of the equity in the company and Peel invested £8m for an 80% share.
In September 2019, the city council sold half of its stake to infrastructure investor Ancala for £10.2m, retaining a 10% stake.
Liverpool City Council’s decision not to invest in the airport energy schemes follows steps taken in January towards “removing financial support” for the airport amid concerns about its proposed £100m expansion and the impact that it would have on the environment and surrounding Green Belt.
The airport hopes its expansion strategy will boost passenger numbers to 7.8m by 2030 by facilitating an increased number of flights.
The airport currently contributes £250m to the Liverpool economy annually. This could rise to £625m if the expansion goes ahead, the airport claims.
Sadly hardly a surprise.
By Anonymous
This council is really moving to the looney left not just for this but other issues too. They pander to politics and views of a small vocal minority and seem to object to any improvement or development in the City. When you consider the debacle LCC has created with various court cases and failed road schemes and their local plan, it makes you wonder how they have the gall to condemn others and potential investment. Perhaps the commissioners should have taken total control?
By Absolutely fed up with LCC.
More signs that Liverpool City Council is anti business and anti jobs, many of those who work at the airport and live locally will feel a bit let down by this lack of commitment . The airport is well supported by those commuters in the Liverpool City Region and further afield, and the airport has been boosted with recent business from Lufthansa , and a new route to Iceland and beyond.
The approach of many councillors to business is markedly anti, and is like a cultish stance aimed at causing unrest.
Other business opportunities, like the Cruise Line Terminal ,appear to have been kicked into the long grass too.
By Anonymous
The Council is only concerned about its own ideology, and not the inerests of the people of Liverpool, who will have to fly from Manchester if there is no investment in our airport
By Anonymous
I’m beyond surprised theses days with LCC. Backward thinking, almost cultish in their zeal to reduce this once great city to a cinder of its former self.
By Anonymous
@Absolutely fed up with LCC would this be the “small vocal minority” who consistently vote for left leaning parties in Liverpool?
By Liverpool Fresh Sea Air
Liverpool City Council have not got a clue they are dragging Liverpool back
By Anonymous
Don’t know many cities that don’t think their airport is a strategic asset, its a poor signal to investors about their appetite to see growth there. Just trying to contrast this with Manchester and Salford, both controlled by Labour authorities from different centre-left traditions, but both totally focused on growth opportunities.
By Rich X
@LFSA, not the electorate, but the current make up of the party at present. The infighting, the alleged mis government, the various little self interested groups who are influenced by different outside influences and their willingness to oppose anything good to secure political points and outdated doctrine. If you want this City to progress then major changes need to be made. The vast majority not only of Liverpool but the country too still vote on a tribal basis which allows a totally unbalanced council or government to form on many occasions. Where is the opposition to speak up and point out wrong doings when they have no power?
Too often the interests of all parties take precedent over the City and country and our elected representatives should remember that.
What side are you on the party or the people?
By Absolutely Fed up with LCC.
You only have to look at the turnout in local elections to see why these poor-to-mediocre councillors get elected, the numbers voting are low, and almost any Labour candidate gets in almost via default, and it`s the majority of Liverpool voters who are to blame ultimately.
The council will soon consult with the population on a number of important issues, and you can all but predict what the outcomes will be,anti-progress, anti-private sector, anti-development, anti-wealth, in fact levelling-down.
By Anonymous
Expansion of the airport will create new jobs and provide a wider service for citizens of Liverpool City Region. What is Mayor Rotherham doing to ensure that this will happen? The Green Party are against air travel, even though recent developments indicate that planes will become carbon neutral in the near future. And quieter too!!
By Anonymous
This is really bad for the image of the city and the economy of the city region …. also bad business…diluting the shareholding loss of value and influence. The green arguments against are short sighted especially as the flights will gradually become more sustainable with different fuel mixes, hydrogen ( from Runcorn !) and even a solar farm . Fortunately the airport will ignore the anti business elements in the council and push ahead , the airports future is bright and Manchester’s congestion and chaotic experience for passengers gives it a furthrr opportunity.shame our anti growth council won’t be part of the success story
By George
In 19th century Europe a few towns successfully opposed the railway and a railway station. Where are they now? This LCC would have opposed the railways AND the docks.
By James Yates
Liverpool is no different to Manchester in having considerable opposition to airport expansion as was the case with with resistance to building of second runway at Manchester airport.The difference with Manchester airport is the airport is in Cheshire and so Manchester politicians can ignore local protests because they don’t vote in Manchester.
By Joe Johnson
Manchester Airport isn’t in Cheshire
By Dave
Surely the chaos at Manchester is temporary due to covid etc? They’re opening Terminal 3 this week. I suppose Liverpool could have used it as leverage but I think things will be back to normal by that time.
By Anonymous
A large part of Manchester Airport is in East Cheshire including the whole of the second runway.
By Harry Swales
Only the 2nd runway of MAN is in Cheshire, ALL terminals and runway 1 are in Manchester. Sorry
By Anon
With friends like LCC, who needs enemies?
By Liverpolitis
Probably fair to say that airport expansions are going to get more headwinds going forward, and its to Manchester’s great advantage that it’s substantially delivered its airport terminal, transit, and runway investments. Very thoughtful that Leeds/Bradford got its expansion blocked by the government recently.
By Rich X
Good for them – airport expansion is incompatible with fighting climate change. Far better to invest in better local public transport.
By Anonymous
“far better to invest in local transport”, don`t think so, the airport contributes £100s of millions into the local economy, cities today have to think internationally to survive and grow , and some people in Liverpool need to lose this “local village ” mentality or we go down the pan fast.
By Anonymous
Appalling decisions being made in Liverpool just Appalling
By Anonymous
Dear Absolutely Fed Up. Even though the electorate voted for the first-past-the-post system so that most votes are wasted and therefore less folk vote, an “every vote counts” voting system would help to solve the problems you list.
By James Yates