By Gleb Stolyarov



FILE PHOTO: The logo of Russia's flagship airline Aeroflot is seen on an Airbus A320 which landed after an inaugural trip at the Marseille-Provence airport in Marignane


© Reuters/JEAN-PAUL PELISSIER
FILE PHOTO: The logo of Russia’s flagship airline Aeroflot is seen on an Airbus A320 which landed after an inaugural trip at the Marseille-Provence airport in Marignane


MOSCOW (Reuters) – Aeroflot said on Friday the state would take up 50 billion roubles worth of its 80-billion rouble ($1 billion) new share offering, a vital cash injection for Russia’s flagship airline that is reeling from the pandemic.

Russia grounded flights abroad in April and has only resumed some routes, cutting revenue streams in half for Russia’s airlines that are also grappling with a plunge in the rouble. Some airlines will need state support to survive, analysts say.

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Aeroflot is holding a secondary public offering in Moscow to be completed around Oct. 26 and has raised 39.1 billion roubles during bookbuilding, including 9.1 billion roubles from the Russian state, the airline said.

The Russian government, which already holds a 51.17% stake in Aeroflot, will also exercise pre-emptive rights to buy a further 40.9 billion roubles in shares, Aeroflot said. Market investors will buy shares worth 30 billion roubles, it added.

Aeroflot’s board was reported to have set the share price at 60 roubles, prompting its share price to fall 8.8% from 65.86 roubles on Wednesday to 60.08 roubles on Friday.

Russia’s Direct Investment Fund said it and leading sovereign wealth funds from the Middle East had become anchor investors in the SPO.

Finance Minister Anton Siluanov said the government’s funds would be taken from Russia’s National Wealth Fund, a separate entity from the RDIF. They are the first state cash injection to a Russian company during the pandemic, which has hit national airlines hard.

Russia’s total airline passenger traffic fell 35% in August year on year. That represented a significant recovery from previous months