Credit crunch delays bid to privatize Chicago's Midway
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Efforts to privatize Chicago Midway have hit a snag. With the economic crisis tightening the credit market, a group of investors that had sought to buy a 99-year lease of the airport is having difficulty raising enough money to complete the deal. In October, the consortium, led by Citigroup's Citi Infrastructure Investors, agreed to pay the city $2.5 billion for the lease, which would make Midway the first major domestic airport to be privatized.
The city of Chicago will give the investors, which also include YVR Airport Services and John Hancock Life Insurance, up to six more months to raise the money, says Jodi Kawada, a spokeswoman for Mayor Richard Daley. The parties had set Monday as the original deadline.
"The global economic recession is obviously having a substantial impact on the availability of financing," Kawada said, in a statement. Chicago would keep the $126 million letter of credit it received from the investors even if the deal falls through.
Chicago Midway was one of the earliest applicants for the federal experiment to allow privatizing up to five U.S. airports, only one of which can be a hub airport the size of Midway.
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