Transaero will receive government guarantees worth 9 billion rubles

The Russian government will provide Transaero Airlines with a state guarantee for a loan in the amount of up to 9 billion rubles. Transaero asked for state guarantees in the amount of up to 10 billion rubles.

The corresponding government decree was published on December 24. State guarantees for the loan, the document says, will be provided to the airline “in 2014.”

The purpose of the loan is to finance the airline’s core production and operational activities. The functions of a government agent are assigned to VEB. The Ministry of Finance is entrusted with concluding an agreement on the provision of state guarantees.

“To provide in 2014 a state guarantee of the Russian Federation in the amount of up to 9 billion rubles to ensure the fulfillment of the obligations of OJSC Aviation Company Transaero on a loan provided by VTB Bank for a period of at least 3 years in the amount of up to 9 billion rubles,” the resolution says government.
Interfax

Transaero is the largest private airline in Russia. It ranks second in the country in terms of traffic volume, second only to Aeroflot.
In November 2014, Transaero reported a sharp drop in profit: over 9 months it decreased by 5.6 times compared to the same period last year. It was reported that the company's financial performance was affected by the weakening of the ruble. In November-December, after the publication of the report, the Russian currency rate sharply accelerated its decline.
Other airlines also found themselves in a difficult financial situation at the end of 2014. Thus, UTair, the third largest air carrier in Russia, cannot service its debt and is negotiating its restructuring. At the same time, the airline’s creditors, through the courts, secured the seizure of UTair’s property as an interim measure for their claims.
Deputy Prime Minister of the Russian Federation Arkady Dvorkovich previously reported that the government is ready to support Transaero and UTair. “We are discussing two support tools. Firstly, government guarantees for loans issued to these companies. <…> Secondly, subsidizing domestic Russian routes,” he said.

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Transaero will receive government guarantees worth 9 billion rubles

The corresponding government decree was published on December 24. State guarantees for the loan, the document says, will be provided to the airline “in 2014.”

“To provide in 2014 a state guarantee of the Russian Federation in the amount of up to 9 billion rubles to ensure the fulfillment of the obligations of OJSC Aviation Company Transaero on a loan provided by VTB Bank for a period of at least 3 years in the amount of up to 9 billion rubles,” the resolution says government.
Interfax

Transaero is the largest private airline in Russia. It ranks second in the country in terms of traffic volume, second only to Aeroflot.
In November 2014, Transaero reported a sharp drop in profit: over 9 months it decreased by 5.6 times compared to the same period last year. It was reported that the company's financial performance was affected by the weakening of the ruble. In November-December, after the publication of the report, the Russian currency rate sharply accelerated its decline.
Other airlines also found themselves in a difficult financial situation at the end of 2014. Thus, UTair, the third largest air carrier in Russia, cannot service its debt and is negotiating its restructuring. At the same time, the airline’s creditors, through the courts, secured the seizure of UTair’s property as an interim measure for their claims.
Deputy Prime Minister of the Russian Federation Arkady Dvorkovich previously reported that the government is ready to support Transaero and UTair. “We are discussing two support tools. Firstly, government guarantees for loans issued to these companies. <…> Secondly, subsidizing domestic Russian routes,” he said.