76% stake of debt-ridden airline unlikely to generate much interest second time around (229 words)

Published: 10/1/2001

Having failed to sell 76% of one of the state's smaller airline holding, the National Airlines of Ukraine, in May this year, the Ukraine State Property Fund has announced that it plans to offer the stake again on 15th October 2001 on what appears to be largely unchanged terms. The reserve price is $1.3m for the stake in the airline, which is reported to have 20 aircraft including An-32 and An-24s, although the winner of the tender must pay $2m of the airline's debts within 90 days and pay wage arrears of $0.9m by 31st December 2001. Given the general problems of the sector and a pending reorganisation of the sector by the government, including Air Ukraine, it is unlikely that the second offer of the stock is going to get substantially more interest than first time around. According to Nikolai Plaksy, General Director of the airline, any interest at all is likely to come from Russian bidders. The airline continues to have problems, with assets valued at $8.5m but debts of $14m, with the main creditor being the Russian ATC authorities, which is owed $4m. The company is currently carrying $20m of debts on its balance sheet, as 80% are considered to be bad debts and unrecoverable.

Article ID: 2787