Aeroflot mulling share-buyback, GDR-split under consideration - company CFO
MOSCOW. Sept 27 (Interfax) - Russian airline OJSC Aeroflot is mulling a buyback of its shares from the market, the carrier's CFO, Shamil Kurmashov, told journalists on Tuesday.
"We're looking at a buyback program because the level [share value] is attractive now," Kurmashov said.
"The shares stood at 84 rubles in December and quotations went up. Therefore, there are grounds to believe that by putting funds in the company's shares and selling them later, we will have made a good investment," he said.
When asked about when the buyback might take place, Kurmashov said: "now generally might be alright, even though doing this two months ago would have been good enough too".
"Like any normal company, we consider this option [a share buyback] but everything is determined by the timing. The moment now is quite favorable," he said, adding that if Aeroflot's shares definitely increase the company might rule against holding a buyback
Kurmashov declined to say whether the buyback could be implemented according to fixed prices or market prices. He said that Aeroflot's management plans to present a program for boosting capitalization in the near future at a meeting of the board of directors. The program is projected for two years. The board will review a proposed price, which would make the buyback attractive, as well as the size of the buyback at this price.
However, Kurmashov said that Aeroflot has no plans to buy back the stake held by National Reserve Bank since the terms in a transaction with a company controlled by Alexander Lebedev would be less favorable that those offered on market. Aeroflot sees no need for buying back NRB's remaining stake, which comes to around 15%. Kurmashov added that 10% has already been bought back, of which 3.55% has been set aside for Russian Technologies in exchange for its aviation assets while 3% has been earmarked for Aeroflot's option program (1% has been used already).
Aeroflot plans to sell shares acquired through the buyback in the framework of its GDR (global depository receipt) or ADR (American depository receipt) programs.
Furthermore, Kurmashov did not rule out splitting Aeroflot's GDRs.
According to Aeroflot's financial results, the company controlled 9.56% of its own shares as of June 30, an increase from 7.3% at the start of the year.
GDRs for Aeroflot's shares are traded in Frankfurt at a ratio of 100 shares per receipt. Deutsche Bank is the program's depository. The program's limit comes to 20% of Aeroflot's capital.