The owners of the London Luton Airport concession company are in the process of refinancing its debt, part of which is maturing this year, according to sources familiar with the situation.

Spanish airport operator Aena and Infrabridge, which operate the Luton Borough Council-owned airport under a concession expiring in 2032, are working with HSBC as financial advisor on the process.

Sources added that HSBC is at an “advanced stage” of negotiation with the lenders, although the timeline of the deal’s financial close remains unclear.

Concession company London Luton Airport Operations Ltd’s (LLAOL) GBP 390m debt package comprises GBP 230m of private placement notes, three bank term loans and a revolving credit facility, according to Companies House filings.

One of the three loans mature in August, while the other bank facilities are due between this year and 2029. The private placement facilities mature between 2027 and 2029. With all of the debt maturities relatively close, the owners decided to refinance it all now.

The last refinancing of debt linked to London Luton Airport took place in 2017, with the participation of several banks and institutional investors, including Barclays, Mediobanca, Natwest, Aviva Investors and Standard Life Assurance.

The concession under which Aena and Infrabridge operate the airport expires in 2032, but negotiations over an extension are ongoing.

Earlier this month, the UK government approved the expansion of London Luton Airport, involving a new terminal that would see the airport’s annual capacity jump from 18 million to 32 million passengers.

The government’s approval came despite recommendations by the Planning Inspectorate to block the expansion on the back of environmental concerns.

Aena welcomed the latest development and said that it “wants to play a leading role in this expansion and to do so much reach an agreement with Luton Borough Council,” which is also a shareholder of the airport.

One of the sources noted that the purpose of the ongoing refinancing is not to raise debt for the expansion but to extend the maturity of the existing facilities.

Further recovering from the coronavirus pandemic, London Luton Airport saw its revenues for 2024 rise from GBP 59m to GBP 76.6m year-on-year, while its passenger numbers increased to 16.3 million, up from 13.5 million.

Aena’s 51% stake in the airport has been the subject of an ongoing arbitration between US energy group NextEra Energy and the Spanish state, Aena’s majority shareholder.

NextEra is attempting to seize some form of control over Aena’s stake, following a decade old arbitration launched by NextEra against Spain’s decision to cut renewables tariffs, which affected two of its solar power plants.

Aena, Infrabridge, HSBC and London Luton Airport did not respond to requests for comment.