Berezovsky, according to reports, is to sell his holdings in Aeroflot and Transaero to East Line

Published: 6/1/1999

According to unconfirmed reports emanating from within the Federal Aviation Service( FAS) the Moscow based cargo airline, East Line group may be buying a stake in Aeroflot from Boris Berezovsky. The block of shares is reputed to be around 14%, but its exact size is uncertain due to Berezovsky’s careful cloaking of his holdings through allied companies. The FAS source reported in Prime-TASS, also speculated that the East Line Group would acquire Berezovsky’s 45% holding in troubled Transaero. Berezovsky is required to dispose of some of his holding after the Moscow Arbitration Court ruled that part of the holding had been acquired illegally under Russian takeover law. The shares required to be disposed however, do not exceed 10% of the company. The price for the two blocks is apparently $50 million and the reaction from Aeroflot for the meantime is no comment. Operating from Domodedovo Airport, East Line is an extremely aggressive Russian player that believes in milking its assets. Industry sources relay stories of the company being entirely orientated towards the cheapest flying options available. Often wet leasing from troubled Russian carriers and simply rolling the leases when the operators are unable to maintain the aircraft. In the last few months the air group has seen a slowdown in its core cargo business and has sought to diversify into the passenger market opening routes to German and Kazahkstan.

Article ID: 554