Third attempt to sell stake sees further drop in price in order to drum up interest (200 words)

Published: 9/27/2001

Following earlier reports of the government's intention to try once more to sell its 13.93% minority stake in Ekaterinburg-based Urals Airlines, it has been confirmed that an auction will be held on 16th November, with bids to be submitted by 13th November 2001. The sale is the government's third attempt in two years, with two offers made to potential buyers in 2000 and no takers. The lack of interest is largely attributed to the airline being controlled by its management through an associated company. The reserve price of the stake is Rb 14.58m ($0.50m) with participants required to pay a refundable security of Rb 2.916m ($0.10m). This price represents a further reduction: the previous attempt in August 2000 had a minimum requirement of Rb 16.2m ($0.57 m) and security of Rb 3.24m ($0.11m). In May 2000, the minimum requirement was Rb18m ($0.63m) and the security was Rb3.6m ($0.13m). Whether this will encourage any interest remains to be seen, although the government must be hopeful that the drop in the price combined with a significantly improved industry outlook will attract buyers.

Article ID: 2778