15 June 2004 03:53
Deripaska Buys Airline for $25.2M
Metals and automotive tycoon Oleg Deripaska on Friday moved into the airline business, trumping four other bidders in
a government auction for 51 percent of regional carrier Kuban Airlines.
FinanceTekhnoTorg, an investment vehicle tied to Deripaska's Basic Element, won the Federal Property Fund tender
for Russia's 16th-largest airline with a bid of 729.5 million rubles ($25.2 million), well above the starting price
of 424.5 million rubles.
"It is an interesting asset ... we already have agricultural business there and the policy of the local
administration is such that it creates favorable conditions for investors," BasEl spokeswoman Eleonora Veitsman
said by telephone.
Kuban director Ivan Babichev said companies linked to Deripaska already owned 29 percent of the carrier, so gaining
full control of the company was a logical step.
"This is positive news," he said by telephone from the company's headquarters in Krasnodar. "It
will of course somewhat limit our freedom, but it will bring investment and help us develop."
One of the airline's key projects is the ongoing overhaul of its hub, Krasnodar Airport.
"I think [Deripaska] is stepping in not only to raise the capitalization of the company, but also as a political
statement that he is coming to the south for the long term," Babichev said.
Babichev said that although he had met Deripaska in Krasnodar, where Deripaska grew up, they had never discussed
developing the airline or the airport.
He also said that one of the losing bids was backed by Viktor Vekselberg, whose holdings include SUAL, the main
domestic rival to Russian Aluminum, Basic Element's most valuable asset, and Access Industries-Renova. It also owns
a stake in Koltsovo, Yekaterinburg's largest airport.
Babichev said he had held meetings with representatives of Vekselberg and that they had named three things they liked
about Kuban -- that it is doing well financially, that it has other assets such as the airport and a fuel company, and
that it is well-run.
However, a Renova spokesman denied any involvement in Friday's auction.
"Renova did not take part, neither did any of the affiliated companies," Renova corporate relations
department spokesman Vasily Verbin said. "It must be a misconception."
One noticeable no-show in Friday's bidding was flag carrier Aeroflot, who just last month said it was interested
in buying Kuban.
"We did not participate," Aeroflot deputy general director Lev Koshlyakov said. He declined to
elaborate.
Kuban operates a fleet of 11 Yak-42s and owns Krasnodar Airport, which handled nearly 1 million passengers, of which
Kuban carried 430,000. The company posted a profit of about $1 million last year on revenues of $44.5 million. Its
domestic flight network includes Moscow, St. Petersburg, Yekaterinburg, Novosibirsk, Irkutsk, Magadan, Samara and
Petropavlovsk-Kamchatsky. It also flies to Turkey, Austria, Cyprus, Italy, Germany and the United Arab Emirates.
BasEl also controls Samara-based Aviakor, a largely idle aircraft manufacturing facility that once made the
Tupolev-154 passenger workhorse. BasEl unveiled plans two years ago to turn an airfield near the factory into an
international cargo hub, but the project never got off the ground.
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[The Moscow Times] |
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