PSP Investments through AviAlliance has been selected as the preferred bidder for a 50% stake in Puerto Rico’s Luis Munoz Marin Airport.

As we reported in November 2016, Oaktree Capital, one of the two investors in the airport, announced it was looking to sell a stake in the airport concession.

Luis Munoz Marin Airport, the busiest in the Caribbean, was privatized in 2013 with the granting of a 40-year concession to a consortium called Aerostar Airport Holdings LLC.

Aerostar Airport Holdings is a limited liability company owned 50% by each of ASUR (Mexico's Grupo Aeroportuario del Sureste SAB de CV) and Highstar Capital IV, which was acquired by Oaktree in 2014.

The consortium made a US$615 million upfront payment to the Puerto Rico Ports Authority (PRPA) as part of the deal, and had planned to invest US$1.4bn in the airport over the course of the lease.

The concession to run the airport has a revenue cap of US$62 million per year for the first five years. The contract then shifts to a long-term revenue sharing agreement between PRPA and Aerostar. Puerto Rico officials valued the airport concession at US$2.57 billion when it was awarded.

The Luis Munoz Marin International Airport is located in Carolina, Puerto Rico, just three miles from the capital city of San Juan. The most recent demand projections estimate that by 2024 traffic will be at 17.9 million passengers and 1,900 pounds of cargo. The Airport is the main entry point to the Island, both domestically and internationally.