Russian state investment vehicle to buy 100 Superjet 100 for Aeroflot


Aeroflot, the Russian flag carrier, signed a preliminary agreement to purchase 100 SSJ100s in September 2018, with deliveries scheduled from 2019 to 2026 (Aeroflot)

The Russian government has found a way to finance the agreement between Sukhoi Civil Aircraft Co (SCAC) and the national airline Aeroflot for the acquisition of up to 100 Superjet 100 (SSJ100) regional jets. The financing mechanism will be through the Russian state-owned development company VEB, which purchases the aircraft for US $ 3.8 billion over a six-year period until 2026 and then arranges its leases. ‘operation over 12 years with Aeroflot. VEB (formerly Vnesheconombank) is essentially an investment bank that supports Russia’s large-scale projects by raising funds in partnership with commercial banks.

There is still no final decision on the origin of the funds, nor on its remuneration mechanisms.

VEB is still counting on support from the federal budget, while Aeroflot is in no rush to even rent the batch of ten SSJ100s which are scheduled for delivery this year. The airline’s board of directors has so far approved only half that number.

VEB’s willingness to buy 100 SSJ100s from Sukhoi Civil and lease them to Aeroflot was announced on October 30 by Russian Prime Minister Dmitry Medvedev, who also heads the VEB supervisory board. Based on the amount required to close the deal – US $ 3.8 billion through 2026 – a plane will cost US $ 38 million. Igor Shuvalov, chairman of VEB’s supervisory board, explained that the state-owned company has created several financing options, which it has submitted to the government for further consideration and finalization by the finance ministry. “It’s a complicated transaction. This requires both capital for VEB and liquidity, ”he commented. “We have developed several options, which include certain government guarantees, or the implementation of other [unspecified] patterns, ”concluded Shuvalov.

As the type’s largest customer, Aeroflot today operates a total of 49 Superjet 100s (one was lost in a fire after a forced landing at Sheremetyevo in May). Over the past summer, industry executives assured that the contract for the first 10 of the 100 jets ordered would be concluded before the end of the year. However, to date, Aeroflot’s board of directors has approved the leasing of only five aircraft and announced a tender to select the lessor, the results of which have not yet been disclosed.


Source link

Previous Stellwagen Group Launches Inaugural Co-Investment Vehicle in ABS Capital Markets
Next Take control of your investment portfolio with a fixed deposit