Aeroflot may receive state support in the amount of 80 billion rubles
The government will allocate 50 billion rubles., Another 30 billion rubles. the company can receive through the state-owned VTB and RDIF
/NOVOSTIVL/ Russia has drafted a support plan for Aeroflot where the government and state bank VTB would buy into a new share issue by the country’s biggest airline, which has been hit by the coronavirus crisis, two sources with direct knowledge of the plan told Reuters.
The Russian Direct Investment Fund (RDIF) may take part in that share issue along with the state and VTB, one of the sources said, adding that under the plan, Aeroflot would be issuing new shares worth 80 billion roubles ($1,15 billion).
Russia is following the example of Lufthansa (LHAG.DE), where the German government will take a 20% stake as a part of a 9-billion-euro bailout, the source added.
The state plans to buy shares worth 50 billion roubles, with VTB and RDIF buying shares worth 15 billion roubles each, he added. The second source said that the new share issue was expected to be “significant.”
An RDIF spokesman told Reuters that the fund, along with some international partners, was considering investing in Aeroflot, without providing details.
“We don’t have such information,” Aeroflot said in emailed reply to a Reuters request for comment. A government spokesman and VTB did not reply to requests for comment.
Both sources said that VTB planned to sell its stake in Aeroflot later. They did not give a shareholding breakdown after the planned new share issue, or say when the bank may sell out of Aeroflot.
Aeroflot, 51,2% state-owned, was hit hard by the coronavirus pandemic, as countries shut down borders, while Russians were in lockdown for two months from late March.
In March alone, the carrier’s passenger traffic slumped more than a third from a year ago and was down 12,3% for the quarter, based on Aeroflot data published in April.
Aeroflot Group, which includes Russian flag carrier Aeroflot as well as Rossiya, Aurora and low-cost airline Pobeda, has a Russian market share of almost 50% based on 2019 data.