S7 shareholders willing to pay Transaero debt with shares
MOSCOW. Oct 23 (Interfax) - The shareholders of S7 Airlines are willing to hand over some of their shares as payment for the commercial debt of Transaero , Russia's second largest airline, S7 co-owner Vladislav Filev said in an interview with national daily Kommersant published on Friday.
"We don't have the resources to service the commercial debt that Transaero now has. But we're prepared to give up part of our shares as payment for the commercial debt to banks, earn a profit for them, so that the shares are worth real money. There is a single key condition: we're not prepared for our stake in Transaero to be less than a controlling interest," Filev said.
He did not explain the goal of acquiring a controlling stake in Transaero, whose operating certificate is being annulled as of October 26 following an inspection by the Federal Air Transport Agency.
He stressed that certain risks arise for S7. "Transaero has a lot of debts. We offered to take Transaero's fleet from state banks VTB and VEB and are promising that these airplanes will generate a positive cash flow for them. But we're not promising that we will be able to earn so much as to cover all of the banks' costs," Filev said.
He also said that in this deal the companies are counting on the support of VEB and VEB, as well as the head of state corporation Rostec, Sergei Chemezov, "who always said that there should be several major airlines in the country."
Transaero, which is drowning in debt and has too many planes, found itself on the verge of bankruptcy in September, forcing the government to look for ways to save the airline. There were plans to sell 75% plus one share of Transaero to rival Aeroflot Russian Airlines for 1 ruble, but Transaero's shareholders were unable to consolidate the necessary stake in time. As a result, Aeroflot dropped its offer and statements from responsible officials came down to the fact that bankruptcy seemed like the only option.
However, on October 20 it was reported that Filev had signed an agreement to buy "at least 51% of shares in Transaero" from Alexander Pleshakov, the husband of Transaero's former CEO and co-owner Olga Pleshakova.