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Transaero might continue operation after selling its controlling stake to S7 co-owner

October 20, 2015, 23:58 UTC+3 MOSCOW
According to the source, a rehabilitation plan is endorsed, Rosaviatsiya would be able to revoke its claims and the company would keep its air operator certificate
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© EPA/SERGEI CHIRIKOV

MOSCOW, October 20. /TASS/. Russia’s distressed Transaero airline will continue its operation after a co-owner of another major air carrier, S7, has bought its controlling stake, a source in the air service industry told TASS on Tuesday.

"The most probable scenario is that the company continues its operation. A plan would be arranged for its financial rehabilitation and debt restructuring that would be agreed with the creditors. Most likely, a foreign bank would be hired as a consultant to help elaborate a restructuring plan," the source said.

According to the source, financial problems are actually the only claim Russia’s Federal Air Transport Agency (Rosaviatsiya) has to Transaero. Once a rehabilitation plan is endorsed, Rosaviatsiya would be able to revoke its claims and the company would keep its air operator certificate.

RBC said earlier on Tuesday Director General of Russia’s air company S7, Vladislav Filev, has bought "at least 51% of shares" of distressed Transaero airline from its majority shareholder, Alexander Pleshakov. According to RBC, the sum of the deal was not made public. The parties however said it was "much bigger than one rouble" (0.016 U.S. dollars) and would be acceptable for them all.

"I looked at such deal because I wanted to prevent the monopolization of the market, so that passengers and sectoral employees could have a possibility of choice between air companies," RBC cited Pleshakov as saying. "Apart from that, our goal was to spare our long-term partners and creditors from losses they would inevitably sustain should our air company go bankrupt."

Filev said Transaero stakeholders "have a plan of settling relations with the company’s creditors" but refused to disclose details. He pledged the new shareholders "will do their utmost to avoid the air company’s bankruptcy.".

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