Loan reflects growing western confidence in the national carrier, with further financing in the pipeline (190 words)

Published: 9/12/2001

Aeroflot has signed a one-year $30m syndicated loan agreement arranged by Austria's Raiffeisenbank, Commerzbank Eurasia and Citibank secured against hard currency revenues. Aeroflot also plans to issue $60m worth of Eurobonds or other medium-term securities in order to raise more funds to construct its new terminal at Sheremetyevo. The raising of the loan, despite its size and maturity, is something of an achievement for the airline, given the condition of its balance sheet, but presumably reflects the western bankers' confidence in the carrier's ability to continue to develop its business. The loan will also undoubtedly assist future financings since it will raise the airline's credit rating. At the time of the announcement Aeroflot said it expects a 2001 pre-tax profit under IAS to rise to $25-40m and a net profit figure of $15m, against $40m and $8.6m respectively reported in 2000. However, the company added the proviso that the number was not secure until " the last passenger is transported". Aeroflot also reported a 21.2% increase in transportation revenues for 8mo01.

Article ID: 2754