Tupolev/Aviastar merger still appears to be far from completion

Published: 12/3/1999

According to press reports, the articles of association for the new Tupolev company are being drawn up to merge the Moscow-based Tupolev Design Bureau and the aircraft production facility, Aviastar, in Ulyanovsk. Once these are agreed, a new board of directors will be established to reflect the ownership structure of the new company, of which 50% is held by the state, 44.4% by Aviastar (6.4% state) and 5.4% by Tupolev Design Bureau (51% state). Tupolev itself seems much less certain about the deal. It has said that non-state Tupolev shareholders have not accepted the agreement, which is being pushed by the government. In September 1999, Tupolev shareholders" objection to the terms of the deal led to Vasily Alexandrov being replaced by Igor Shevchuk as General Director, despite the state"s majority, owing to his support of the 4.5% offered to Tupolev shareholders as their share of the new company. This holding is calculated on the book assets of the respective companies, which resulted in the substantially larger Aviastar holding. Just two weeks later, Alexandrov was reinstated and Shevchuk returned to his previous position as Chairman of the Tupolev board. The state of affairs at Tupolev is currently being investigated at the request of its board of directors, in particular, the reasons for the virtual cessation of its military programmes under Alexanderov and its failure to complete a contract with India. The merger which, in theory, represents a logical step to streamline aircraft production, seems in practice to be a much more chaotic affair. Associated Articles www.concise.org 4th October 1999

Article ID: 1164