The recapitalization of “Aeroflot” has so far turned out to be half as much as planned
Rosimushchestvo and the Ministry of Finance, on behalf of the state, submitted a joint application for the purchase of 1,531,234,889 new ordinary shares of Aeroflot, the company said in a statement. The share placement price was 34.29 rubles. Thus, the state invested 52.5 billion rubles in Aeroflot. The share of the Russian Federation in the national air carrier increased from 57.34% to 73.77% as a result of the additional issue.
The Board of Directors of Aeroflot approved the additional issue of up to 5.4 billion ordinary shares at the price of 34.29 rubles. per piece still in May 2022. In the case of realization of the additional issue in full, “Aeroflot” could receive about 186 billion rubles. It was planned that shares worth 106.65 billion rubles. will be acquired by the state at the expense of the National Welfare Fund (FNB). Thus, the actual recapitalization in 52.5 billion rubles. now turned out to be half as much as planned.
Funds drawn from the state will help fully cover the group’s needs within the framework of debt restructuring under letters of credit, Aeroflot notes.
The representative of “Aeroflot” clarified that the parameters of the additional issue had to be formed much earlier than the placement “due to the long corporate procedures of the issue”. The obligations under the letter of credit were expressed in foreign currency, and the ruble equivalent of the obligations decreased due to the gradual strengthening of the ruble, says the interlocutor. Final requirements [в дофинансировании] were formed by July, he specified.
The letters of credit mentioned by the airline were part of leasing contracts for foreign aircraft. Usually their amount is about three monthly lease payments. As Vedomosti reported, these letters of credit were opened after March 28, when Western lessors did not receive their planes from Russian operators. The return of the company’s aircraft was demanded in fulfillment of Western sanctions against Russia, introduced after the start of a special military operation (SVO) in Ukraine.
“Vedomosti” sent a request to the Ministry of Finance.
The last time Aeroflot was recapitalized in 2020 against the backdrop of the coronavirus pandemic and a significant reduction in flights: the company then raised 80 billion rubles. during the dopemission. The price of accommodation was 60 rubles. per share. Shares for 50 billion rubles. bought by the state with funds from the same FNB.
In June 2022, the government of the Russian Federation announced recapitalization through the purchase of bonds of Ural Airlines, Sibir and Aurora for the amount of 17 billion rubles. at the expense of FNB funds. This will make it possible to restructure the debt to banks, which arose due to the disclosure of leasing letters of credit, through a bond loan for a longer term, explained the representative of S7. The airline will issue bonds for purchase by banks, and funds from the National Bank of Ukraine will go to the banks, that is, the carrier will not receive them, he explained.
Due to sanctions, restrictions on air traffic in the south of Russia and difficulties with foreign aircraft, Russian airlines received a record eight-year operating loss of 61.1 billion rubles in the first quarter, the Association of Air Transport Operators (AEVT) reported on June 24. According to AEUT data, passenger traffic for March-May 2022 amounted to 17 million people, having decreased by 15% compared to the same period in 2021. The decrease in traffic after the first half of the year amounted to 9%, wrote “Interfax” with reference to the head of the Ministry of Transport Vitaly Saveliev.
The government, in turn, developed a set of measures to support the aviation industry. 100 billion rubles were allocated to help airlines on behalf of President Vladimir Putin. They will be distributed according to the list of the Russian Aviation Agency, published on June 29. Airlines of the Aeroflot group (“Aeroflot”, “Russia”, “Pobeda”) received half – 49.9 billion rubles. from 100 billion rubles. – subsidies.
According to Oleg Panteleyev, the director of the branch agency “Aviaport”, the decrease in the amount of state support of “Aeroflot” during the additional issue of shares could have occurred due to the improvement of the carrier’s condition. “Aeroflot also became the main recipient of subsidies in the amount of 100 billion rubles. for airlines,” the expert reminds.
Panteleev believes that the activity of “Aeroflot” was positively influenced by two factors: the development of the route network and, as a result, the increase in the percentage of seat occupancy. Moreover, as the expert notes, the Aeroflot group occupies a favorable position in international transportation. “Aeroflot has Airbus A330s purchased from financial leasing, and Russia has the largest number of SSJ100s that can fly abroad without hindrance. In the conditions of the price of tickets for international destinations, the group receives a good profit from this,” said Panteleev.