Zurabov confirms the potential for Aeroflot's ADR issue

Published: 5/19/2000

In a statement Alexander Zurabov, Aeroflot's Deputy General Director for finance, has reiterated the potential for the Russian flag to issue ADR Level 1 or GDRs in 2000. Zubarov said that the documentation had been prepared in 1998 before the financial crisis and the airline had received a good reception during its recent institutional investor roadshow in Europe in London, Paris, Zurich and Amsterdam. The audited accounts for 1999 under IAS are due to be completed by the end of June or early July, although there are no plans to show them at the company's forthcoming AGM, probably due to the fact that they are unlikely to be completed. When the original ADR issue was planned it was stated that the shares for the receipts would be purchased from shareholders, because the state would not allow its 52% controlling stake to be diluted. It seems likely this year that the state may sell shares for the ADR, if the airline sticks with its plan to issue ADRs for 5-10% of its outstanding shares that it outlined in 1998. Zubarov, according to Berezovsky-owned Russian daily Kommersant, is the potential replacement for Valery Okulov as General Director; now the latter has lost the protection of his father-in-law Boris Yeltsin. Zubarov is seen as being in the Berezovsky camp through his brother Mikhail, head of the Russian Pension Fund and reported to be close to the oligarch. Whether the media pot stirring points to a change at the top is difficult to tell, but Putin's course of action with the oligarchs generally and with Berezovsky in particular, is uncertain and the subject of much speculation. Although the recent appointment of a Prosecutor General, who is seen as being close to Berezovsky, suggests that his previous misdeeds at Aeroflot will not be pursued and the oligarchs still have a bit of leverage when they decide to use it.

Article ID: 1797