China fund buys stake in London's Heathrow airport
BEIJING (AP) - The Chinese government's main sovereign wealth fund said on Thursday it has bought a 10 per cent stake in the operator of London's Heathrow Airport, expanding its investments in British infrastructure.
China Investment Corp gave no financial details but Ferrovial, the Spanish company that owns 49.99 per cent of Heathrow Airport Holdings, said the fund paid other shareholders a total of US$725.8 million (S$885 million) to acquire its stake.
CIC was created in 2007 to manage a portion of China's multitrillion-dollar foreign reserves in hopes of earning a higher return. Its early investments were mostly small stakes in publicly traded companies to avoid stirring political opposition abroad but the fund has begun making bigger direct investments.
Ferrovial said it sold a 5.72 per cent stake in Heathrow Airport Holdings to a CIC subsidiary, Stable Investment Corp, for 257.4 million pounds (S$506 million). Ferrovial said Stable also acquired shares from other owners for 192.6 million pounds at the same time for a total 10 per cent stake in the company.