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MarketScreener Homepage  >  Equities  >  Moscow Micex - RTS  >  Aeroflot - Russian Airlines    AFLT   RU0009062285

AEROFLOT - RUSSIAN AIRLINES

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Aeroflot to raise $1 billion in Russia's first state-backed rescue of pandemic

10/09/2020 | 10:43am EST
FILE PHOTO: The logo of Russia's flagship airline Aeroflot is seen on an Airbus A320 which landed after an inaugural trip at the Marseille-Provence airport in Marignane

MOSCOW (Reuters) - Aeroflot said on Friday the state would take up 50 billion roubles worth of its 80-billion rouble (772.3 million pounds) new share offering, a vital cash injection for Russia's flagship airline that is reeling from the pandemic.

Russia grounded flights abroad in April and has only resumed some routes, cutting revenue streams in half for Russia's airlines that are also grappling with a plunge in the rouble. Some airlines will need state support to survive, analysts say.

Aeroflot is holding a secondary public offering in Moscow to be completed around Oct. 26 and has raised 39.1 billion roubles during bookbuilding, including 9.1 billion roubles from the Russian state, the airline said.

The Russian government, which already holds a 51.17% stake in Aeroflot, will also exercise pre-emptive rights to buy a further 40.9 billion roubles in shares, Aeroflot said. Market investors will buy shares worth 30 billion roubles, it added.

Aeroflot's board was reported to have set the share price at 60 roubles, prompting its share price to fall 8.8% from 65.86 roubles on Wednesday to 60.08 roubles on Friday.

Russia's Direct Investment Fund said it and leading sovereign wealth funds from the Middle East had become anchor investors in the SPO.

Finance Minister Anton Siluanov said the government's funds would be taken from Russia's National Wealth Fund, a separate entity from the RDIF. They are the first state cash injection to a Russian company during the pandemic, which has hit national airlines hard.

Russia's total airline passenger traffic fell 35% in August year on year. That represented a significant recovery from previous months due to a surge in domestic air travel as Russians holidayed at home rather than abroad.

Total passenger air traffic is forecast to fall 53% this year to 60 million people, the transport ministry said on Friday.

LEASING DEBTS

Aeroflot reported in August an 85% fall in second-quarter revenue. Other major Russian carriers do not publish their results.

Exacerbating the headwinds facing the sector, the Russian rouble has fallen 24.5% against the U.S. dollar this year, increasing costs for airlines that mostly lease their aircraft from foreign firms and pay for spare parts and some maintenance in dollars.

"An array of problems remain - the dollar rate is rising which our leasing payments depend on, while we get our income in roubles," a spokeswoman for Ural Airlines, Russia's third biggest carrier, said.

Smartavia, a private airline, said around a quarter of its expenses were currently in foreign currency. Aeroflot, S7, Utair declined to comment.

Aeroflot, which leases 354 out of 360 of its planes, said in its financial reporting that its leasing debt rose 13% in the first half of 2020.

Mikhail Ganelin, an analyst for Aton, said a prolonged devaluation of the rouble would add to other problems that have already put Russia's airlines in a "very difficult" financial situation.

"It will be very difficult to resolve them without state support and state support for the sector would be the right step like in many other countries," he said.

(Reporting by Gleb Stolyarov; additional reporting by Anastasia Teterevleva; Writing by Tom Balmforth; Editing by Emelia Sithole-Matarise)

By Gleb Stolyarov


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
AEROFLOT - RUSSIAN AIRLINES -0.25% 71.3 End-of-day quote.-31.11%
ALROSA -0.49% 87.05 End-of-day quote.3.24%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) 0.04% 75.839 Delayed Quote.22.05%
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Financials (USD)
Sales 2020 4 251 M - -
Net income 2020 -1 165 M - -
Net Debt 2020 8 609 M - -
P/E ratio 2020 -1,36x
Yield 2020 -
Capitalization 2 278 M 2 274 M -
EV / Sales 2020 2,56x
EV / Sales 2021 1,27x
Nbr of Employees -
Free-Float 44,5%
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Mean consensus OUTPERFORM
Number of Analysts 9
Average target price 1,06 $
Last Close Price 0,95 $
Spread / Highest target 101%
Spread / Average Target 11,3%
Spread / Lowest Target -31,5%
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Managers
NameTitle
Andrey Chikhanchin Chief Executive & Financial Officer
Yevgeny Ivanovich Ditrikh Chairman
Vladimir Nikolaevitch Antonov First Deputy Chief Executive Officer-Operations
Kirill Igorevich Bogdanov Deputy CEO-Information Technology
Igor Viktorovich Parakhin Director-Technical & Deputy CEO
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