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UTair asks to write off 30 billion rubles of debt

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UTair asks to write off 30 billion rubles of debt
March 26
13:00 2019

The Russian airline UTair and Raiffeisen Bank have been developing a new financial model for half a year. As a result, the airline “UTair” asked the bank to write off about 30 billion rubles of debt. This information is provided by the Russian newspaper Vedomosti, which refers to the insider information.

The airline asks to fully write off a 12-year syndicated loan, as well as to write off 50% of the 7-year loan. By mid-February, the first debt was 23.7 billion rubles, and the second was 15.4 billion rubles. UTair proposed this method of the debt restructuring at the meeting with the creditors on March 21.

These are not the only debts of the air carrier. There are also 17.4 billion rubles, which the company borrowed from Sberbank. 13.3 billion rubles is another debt on bonds and 4.9 billion rubles they have to return to Surgutneftegaz. In total, the airline has accumulated 74.7 billion rubles of debt. UTair asks to write off 40% of the total debt – 31.4 billion. This would help to get rid of most of the syndicated loan. The sources of “Vedomosti” say that the company does not ask to write off the remaining debts. By the way, the carrier’s revenue for the first half of last year amounted to 36 billion rubles with a net loss of more than 5 billion rubles.

The company asks to write off the debt as it cannot service it. If the banks refuse to write it off, the carrier will be declared bankrupt. In such a case the creditors will receive only a few kopecks from one ruble of the debt. According to the source close to UTair, the issue of bankruptcy was not discussed at the meeting.


            The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade

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