The leasing company is drifting

The head of Rosprom changed the IFC profile

The head of the Federal Agency for Industry (Rosprom) Boris Aleshin said yesterday that there will only be one leasing company left in the domestic aircraft industry, enjoying state financial support. Now there are two such companies in Russia, and in both of them the official’s words were taken with skepticism.

Mr. Aleshin’s principled position that the domestic aviation industry does not need more than one leasing company has been known to market participants since at least 2004. The news yesterday was that the head of Rosprom said which company he sees in this role.

In 2001, two companies won the competition to receive government financial support for organizing the production of domestic aircraft: Ilyushin-Finance Co. (IFK) and Financial Leasing Company. In accordance with the terms of the competition, both companies sold controlling stakes of their shares to the state. It is in this way, through an increase in the authorized capital, that they receive government funding. The 2005 budget allocated 6 billion rubles for this.

Commenting on the progress of the creation of the United Aircraft Company (UAC), into which all the main core enterprises of the country should merge, Mr. Aleshin said yesterday: “UAC will have to solve the problem of two leasing companies. One of them will likely drift to another type of business.” He added that, given the “small volume of orders and problems with shares,” IFC will probably have to “drift.” According to the head of Rosprom, it can transform into a division of the UAC for the marketing of civil aircraft. Thus, he made it clear that FLC would be entrusted to continue leasing projects with state support.

At the IFC, Mr. Aleshin’s words were met with bewilderment yesterday. The general director of the company, Alexander Rubtsov, conveyed through his press secretary that Mr. Aleshin outlined one of the options for the future development of the UAC, which was discussed, but was not officially adopted. The head of the IFC was especially surprised by the official’s statement about a “small volume of orders.” According to the company itself, its order portfolio at the beginning of 2006 consisted (including firm orders and options) of 15 long-haul Il-96-300 airliners, seven medium-haul Tu-204s of various modifications and 28 regional An-148s.

It is interesting that the competing FLC, in general, also assessed Mr. Aleshin’s promising statement rather skeptically. FLC Deputy General Director Sergei Galperin told Vremya Novostey yesterday: “There are many different options for leasing companies to join the UAC. The leasing company acts as a customer in relation to the aviation industry. The main question is whether it is generally advisable to include it in the manufacturer's composition. It has not yet been resolved, and therefore, all further organizational and structural decisions regarding leasing companies are completely in the realm of pure speculation.”

As one of the options, Mr. Galperin said, the merger of state stakes in FLC and IFC under the management of a new company is being considered. Within the framework of such a holding structure, both of them would be able to continue the projects that they are currently financing. The state directly or indirectly controls 78% of the shares of FLC and 54% of the shares of IFC.

Mikhail KUKUSHKIN