Skyport On $5.7 Million Payment By Government To Project Lenders

News Release: SKYPORT, Bermuda – Skyport chimed in today on that $5.7 million payment announced by the Minister of Transport, Neville Tyrell on Friday.

A spokeswoman said today: “As recently announced by the Minister for Transport, the Government of Bermuda fully met its obligation under the project agreement and made a payment of $5.7 million into the project’s minimum revenue guarantee (MRG) account.

“It is important to first understand why the MRG provision was necessary in the Agreement.

“The success of airport development deals is largely dependent on the ability to maintain and grow passenger revenue.

“For Bermuda, passenger numbers have been in an overall downward trend for some time. For lenders to invest in the airport project, they required some protection against the risk of a continued decline in passenger revenue and economic shock events that could threaten Skyport’s ability to pay off its debt,” she added.

“The project agreement expressly prohibits utilization of any MRG proceeds to pay for construction costs or to be used toward profits or dividends. Rather, the thresholds for triggering the MRG were calibrated solely to ensure that the Project is able to sustain its debt service obligations during periods of unprecedented revenue shortfall. That said, Skyport fully appreciates the importance of the issue and we have not yet determined, together with the project lenders, the extent to which the funds recently deposited in the MRG account will be utilized, if at all.

“At this extraordinary time, it is important to highlight the depth of Aecon and Skyport’s commitment to the project. To date we have made approximately $370 million in capital investments in Bermuda, and these investments – together with 100% staff retention – have continued undiminished throughout the Covid-19 pandemic and airport shutdown, notwithstanding the absence of revenue. We are also proud of our continued investment in the community through Skyport’s social investment programme and our robust local economic engine – now approaching engagement of 400 local vendors, suppliers and subcontractors.