6 Oct 2010 17:20

UTair shareholders approve bond issue, loan for $20 mln

MOSCOW. Oct 6 (Interfax) - Shareholders in Russian airline UTair have authorized the company to guarantee 6 billion rubles in bonds issued by an SPV, UTair Finance, the company said in an official statement.

Shareholders approved the measure in voting at an ESM on September 30.

The bonds will be issued in four series with maturities of up to six years and a coupon rate up to 12.5% annually.

The proceeds will be used to refinance loan debt. In addition, the bonds will be used to improve the structure of the loan portfolio, by replacing more expensive short-term loans, reducing the effective interest rate and releasing property now held as loan security.

The bonds will include an issue of exchange bonds. The timing of their placement will be determined by the market. The placement of the bonds was also slated to be examined at the September 30 meeting, although the company provided no information on that score.

UTair currently has two issues of exchange bonds in circulation totaling 3 billion rubles, as well as third series bonds totaling 2 billion rubles.

In addition, shareholders approved plans to open a credit line totaling $20 million from Surgutneftegazbank. The credit line is for three years at 7% interest, to be secured with "helicopter and airplane airframes and aircraft engines" totaling up to 210 million rubles.

UTair is one of the biggest airlines in Russia and one of the biggest commercial helicopter operators in the world. Central Surgut Depositary LLC owns 75.64% of shares, which, according to unofficial reports, are owned by companies affiliated with Surgutneftegas . The remaining shareholders own stakes no larger than 5%.