Still no confirmation of new shareholder's identity (462 words)

Published: 5/21/2001

As expected, Aeroflot's AGM on 19th May 2001 did not reveal the identity of the airline's new minority shareholder, reported to be Russian Aluminum. This may reflect the fact that the candidates for the election had to be presented in February and that the new shareholder had not accumulated sufficient shares to move at that point. Other minority shareholders lost their representation on the board. The foreign investors' candidate, Oleg Kuzmin, General Director of Absolut Invest, supported by Pruett Enterprises Limited (NCH), received less than 1% of the votes cast. Kuzmin stood, following the departure of David Herne from Brunswick Investment Management. The low level of support suggests that foreign investors have largely sold off holdings over the last few months, including Brunswick Capital Management. Of the nine board members, seven are from the state. The remaining two, Valery Okulov General Director of Aeroflot and Alexander Zubarov, Deputy General Director and Finance Chief, retained their seats. Zubarov's position had been considered to be vulnerable. Interestingly, one of the government candidates, Alexander Borodin, Head of Transport and Communication at the Ministry of Property, was not supported by the state and gained less than a 1% share of the vote. This is a curious position for the primary manager of the state's assets in the run up to a possible sale of the government's stake. It could be a backlash in response to some of the long-held animosities, when the ministry has been seen as an obstacle to liberalisation and to the sale of assets. Okulov refused to disclose the current share ownership structure, except to comment that, on 20th March 2001, at the closure of the shareholders' list for participation in the AGM two new companies with holdings of around 10% of the airline had emerged. Okulov did not reveal the names involved but, according to reports, these are offshore companies: Carroll Trading SA, registered in the Virgin Islands and Nimegan Trading, registered in Cyprus. Both are connected to oil company, Sibneft, which is controlled by Roman Abramovich and Russian Aluminium. Rumours of an EGM, with the possible sacking of senior managers continue to persist, although given the government's majority, it is unclear why such a move was not made on Saturday. Okulov received a fair amount of flak from disenchanted employees at the meeting, unhappy over pay and conditions and the introduction of new regulations governing these areas. He stated that these problems are being overcome: a view not shared by the unions. The shareholders also approved amendments to the company's charter, expanding the services that the airline can offer, as well as an amendment allowing the management to borrow up to 25% of the company's assets, without board approval.

Article ID: 2546