Murmansk Airline sale goes through for $5.1m well above expected $3m

Published: 12/28/1999

It seems that the sale of Murmansk Airlines has gone through on the 23rd December 1999 with the bankrupt airline being acquired for $5.1m according to reports. The successful bidder, as expected, was Murmansk Aviation Company, a subsidiary of Norilsk Nickel, one of the airline"s major creditors, reportedly owed over $2m and owner of one of the airline"s three Tu-154s through one of its subsidiaries Severonickel. The intention of Norilsk Nickel according to Deputy General Director Dmitry Zelenin, is too restructure the airline and recover its investment, rather than get into the airline business. The main motivation of NN in making the investment, appears to be to continue to provide air transport to its various subsidiaries in the Kola Peninsula, where Murmansk operate, and additionally endear itself with the Murmansk regional administration, which had sought the company"s support against the previous owners of the airline, the Russian Aviation Consortium. NN believes that it need six months to understand the airline and turn it around, but given that only four of its fleet are currently flying, it could be quite a challenge. The airline"s fleet includes 3 Tu-154M,2 An-2, 3 Mi-8,4 Ka-32 and 10 Mi-2. Despite the poor condition of the airline there were two other bidders in the tender for the airline. Monros, a company from Monchegorsk bid$3.1m for the airline and Baltinvestovsky, assumed to be a front for St Petersburg carrier Pulkovo, bid $5m.There was also reported interest from Moscow City Government controlled airline, Altant Soyuz and an unnamed Pakistani airline, although both were too late to enter bids according to reports. Associated articles: www.concise.org 25th April 1997, 16th September 1999

Article ID: 1256