Krasair purchase of Tu-204s in doubt after problems with payment to Aviastar

Published: 1/12/2000

In July 1999, the deal between Krasair and Aviastar for the purchase of ten Tu-204s, over a period of five to six years, was warmly welcomed by the regions where the two companies are based. The deal was particularly notable as it was achieved without the assistance of the federal government. The deal provided Krasair with the aircraft at a substantially lower price than normal and provided Aviastar with prepayment of the purchase price and a barter package including the aluminium for the aircraft from Krasnoyarsk Aluminium. The deal required prepayment for the first two aircraft, to be delivered in 1999 and 2000. This was rumoured to be $52m, although this clearly conflicts with the reported 50% discount over the usual price of $26m per aircraft. The deal was predicated on the assumption that Krasnoyarsk regional government"s central role, as large shareholders in the region"s industries including Krasair, would allow it to raise the cash and the barter inputs. However, relations between Governor Lebed and the companies have deteriorated significantly in the interim. Krasnoyarsk Aluminium has suspended its deliveries, having delivered less than $1m of metal and has recently said it would only deliver metal to Krasair for repair of older aircraft. Lebed now finds himself without funds to finish the aircraft and, according to reports, has closed doors with the federal authorities. Whether the two almost complete aircraft will be delivered for Ulyanovsk appears to be in some doubt. Aviastar"s representative in Moscoow, Boris Brusilovsky however, believes that Krasair will find the financing and the two aircraft will be delivered ‘eventually", but stated that the ‘option" on the other eight was unlikely to be converted to a firm order. The failure of the deal from the Krasnoyarsk side appears to be partly attributable to the suspicion among the Krasnoyarsk companies that they were simply supporting Governor Lebed"s election campaign by the back door, owing to the involvement of Nikolay Verner and Stanislav Petrushko: both key Lebed deputies in the organisation of the deal and Krasair. Associated article: www.concise.org 21st July 1999

Article ID: 1302