Government finally moves forward on leasing schemes (490 words)

Published: 6/27/2001

On 22nd June, German Gref, Minister of Economics and Trade Development, signed the decree defining the tender for aerospace leasing structures. The tender will be the responsibility of Gref's deputy, Ivan Materov and will also involve the sale of a controlling interest in the structure to the government. At present, little detail is available, but what there is appears to tally with the government's private and public statements over the last few weeks. With one exception, reports have suggested that the capital requirement, originally reported to be $100m, may have shrunk to $50m. This supports the suggestion that some of the groups, cited as having interest in tendering, were unable to get the required backing and that the delay in announcing the tender has been to allow a reconsideration of the requirement. The terms of participation in the tender are: · No tax debt · Documented bank guarantees for proposed projects · Agreement with an aircraft producer · Authorisation for the issuance of stock for transfer to the state The tenders will be required to be submitted by 13th August and a decision made on the winner within 30 days. Depending on reports, there will be three or four participants from among the following: · Ilyushin Finance with National Reserve Bank (NRB) and, reportedly, Aeroplan-Alliance (a regional cooperation led by Krasair) has already declared its intention to tender, but is reported to be working hard to increase its capital, through NRB taking a controlling interest by means of the contribution of airframes owned by NRB at VASO. Alexander Rubtsov, General Director of Ilyushin Finance, however, says that 95% of the balance sheet of the leasing company will be in cash. · Financial Lease Company (FLK), a Tatarstan Government backed leasing company with a number of reported participants, including oil company Tatneft and the International Bank St Petersburg, has also declared its intention to tender and will hold a meeting of shareholders on 29th June to raise the authorised capital. · The Leader Group · OOO Aviation Lease Company Tupolev · Aeroflot and Sibir, which have announced an intention to tender and will contribute aircraft to the scheme. They are reported to be in discussion with financial holding company, Interros, for further participation. From what has been said by the Ministry of Economics, the winner of the tender will be the group that demands the least of the government initially and then reduces even that as quickly as possible. However, given that Sberbank is likely to be the major provider of finance to any successful scheme, this suggests that there might be little difference between bids, although the FLK may well have the best backing and already has the experience of arranging financing for the Tu-214. It is also worth noting that the political skills of Ilyushin should not be underestimated.

Article ID: 2611