Airport looks to holding structures to bring in investment (600 words)

Published: 9/29/2000

After a long struggle for control of Novosibirsk's airport, the Chairman of OAO Airport Tolmachevo Valery Bashkov, who is also vice governor of the Novosibirsk region, has declared that the state's controlling stake (51%) in the airport will probably not be offered for sale. The sale part of the privatisation of the government 's assets ends privatisation plans for the meantime at least. The main shareholders are: Ministry of Property of Russia (51%), OOO Itog, Moscow (12.1%), and OAO TEK Ertan, Moscow (8.89%). According to Bashkov the ministries involved Transport and Property, had decided that Russia should have 40 main airports with some level of state control and Tolmachevo, one of largest in Russia, will probably remain under state control. The Ministry of Property, said that the decision was not finalized, but confirmed the statement that there are no current plans to sell the stake. For the airport and its main user Sibir, the decision may have some profound implications. The $30m that the sale was supposed to be raised by the sale, was earmarked for re-investment in a second runway and in the reconstruction of the airport's terminal To attempt to get round this problem, the board of the airport have approved a plan for the airport over the next five years that involves the development of the asset through a holding company controlled by OAO Airport Tolmachevo, but offering investment opportunities to become minority shareholders. Whether this will be attractive to outside investors without the transfer of the asset of the airport itself to the holding company, will have to wait. To date however, foreign investors have been unhappy as minority holders in direct ownership situations, it is unclear if they are going to be any happier in an investment once removed for the main asset. Currently the airport has four subsidiaries, onboard food production shop, passenger and cargo terminals, jet fuel complex. In which its share varies from 34% to 51%. The company proposes to sell up to 49% of these holding into the holding structure giving the investors the right to participate in the airport's services if not the airport itself. According to Bashkov, the final version of the plan will be finalized by the beginning of October and presented on the 19th October 19. The company also signed a new 4-year contract with the present General Director of Tolmachevo Airport Alexander Mozzherin. In H1 2000, the airport served 428,300 passengers, falling short of expectation of 520,000 and 90,000 passengers less than the H1 1999. The decrease in passenger traffic is explainable in part by the general decline in traffic due to higher fuel cost and accompanying ticket price increases, and continuing problems with some of the airport's main customers due to non payments of fees. The launch of new routes by Sibaviatrans, Alrosa, and Aeroflot however, increased transit traffic through the airport by 27%. Despite the lower than expected traffic, the revenues of the airport made budget in the first half increasing by more than 24% to 123.1m rubles ($4.6m). Aviation activities represented 71.8% of total revenues (72.5% in H1 1999), contributing to gross income of 23.6m and net income of 17.6m rubles.

Article ID: 2098