Istanbul Airport Group Said to Seek Additional Billion-Euro Loan

(Bloomberg) -- The builders of the world's biggest airport are talking with lenders for an additional 1 billion euros ($1.23 billion) to complete the first phase of the airport, two people with knowledge of the plan said.

The five-member group of local contractors is tapping banks already exposed to the project, going back to the lenders that gave an initial 16-year loan in 2015 for 4.5 billion euros, said the people, who asked not to be named because the plan is confidential. The extra loan will help the consortium to finish the construction work on the six-runway airport, which is designed to handle 90 million passengers annually in its first phase, the people said.

The 10.2 billion-euro airport, located on the Black Sea coast to the northwest of Istanbul, should eventually have capacity to serve 200 million passengers in 2028, making it the largest in the world, according to its website. The consortium of builders, known as IGA Havalimani Isletmesi AS, is made of Limak Insaat, Kolin Insaat, Kalyon Insaat, Mapa Insaat and Cengiz Insaat. They won the auction in 2013 with a pledge to pay the government 22.1 billion euros through 25 years of operation.

The group took the initial loan, the largest to date at the time for a company in Turkey, from TC Ziraat Bankasi AS, Turkiye Halk Bankasi AS, Denizbank AS, Turkiye Garanti Bankasi AS, Turkiye Vakiflar Bankasi TAO and Denizbank. Ziraat, Turkey's biggest bank by assets, was the largest lender with $1.5 billion while fellow state-run lenders Halkbank and Vakifbank each lent $966 million to the project, according to loan data on Bloomberg.

Turkey is building the airport to support the expansion of its flag carrier Turkish Airlines. The airline is positioning itself to compete with European and Gulf airlines through a growth model based on international transit traffic, with Istanbul a main hub rivaling London, Frankfurt and Dubai.

To contact the reporter on this story: Ercan Ersoy in Istanbul at eersoy@bloomberg.net.

To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Benjamin Harvey

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