THE federal government Future Fund has been given approval to spend $2 billion buying stakes in a range of Australian and European airports.
Investors in the Hastings Fund Management-controlled Australian Infrastructure Fund (AIX) on Tuesday voted to sell its holdings in the sought-after airport assets to the Future Fund.
The vote means the Future Fund can take control of AIX's stakes in Perth Airport, Queensland Airports, Northern Territory Airports and the Australian Pacific Airports Corporation, which owns Melbourne and Launceston airports.
AIX also owns a 40 per cent stake in the investment company Hochtief AirPort Capital, which holds interests in Sydney, Athens, Dusseldorf and Hamburg airports.
Now that investors have approved the deal, AIX plans to begin talks with the Future Fund about individual sale agreements for each of its airport assets.
However that move will trigger pre-emptive rights provisions giving AIX's fellow investors in the airports the first chance to buy its shares before the Future Fund.
The AIX chairman, Paul Espie, said it remained to be seen how the co-investors would react, but he expected some to take up their rights to increase their holdings.
"We are unable to predict the outcome of this and may, under certain circumstances be obligated to pay the Future Fund up to $20 million if pre-emptive rights are substantially executed by the other shareholders," he told investors.
"Those shareholders will then have paid AIX the price offered by the Future Fund for those interests in those assets."
AIX plans to return all cash raised to investors before winding up. Securityholders expect to receive between $3.19 and $3.23 a security, to be paid in two instalments.
AIX also expects to pay a distribution for the six months to December 31, 2012, of about 5.5¢ a security.
The Howard government set up the Future Fund in 2006 to help meet the cost of public servants' superannuation payouts. On September 30, it had $79.98 billion worth of assets in its investment portfolio.