Russian airline Aeroflot is seeking up to $1.2 billion in loans from western banks to fund its purchase of 39.9% of Italy's Alitalia the Moscow airline said Monday.
The airline's pledge to pursue financing is a sign of its seriousness, a spokeswoman told The New York Times. Russia's Vedomosti newspaper quoted Mikhail Poluboyarinov on Friday, the Russian flag carrier's finance director, as saying Aeroflot had sent letters to 20 foreign banks including Deutsche Bank, Bank of Scotland, Citigroup, Commerzbank and ABN AMRO. Vedomosti quoted a source involved in the talks with banks as saying that it hoped to borrow between €500 million and €900 million ($373.8 million -$1.2 billion).
Russia's biggest carrier in April joined with Italy's largest bank, UniCredit SpA, in its bid for the money-losing Italian flag carrier. Aeroflot and the bank are currently in talks with another European partner to join them, a UniCredit bank official said Monday. Aeroflot has argued the routes the two airlines fly are complementary and will bring efficiencies, the Times said. Alitalia flies to African and South American cities from Rome that Aeroflot cannot easily reach. Aeroflot and UniCredit are competing for Alitalia against Italian tycoon Carlo Toto, owner of Alitalia domestic competitor Air One, and a consortium made up of two US private-equity firms - TPG Capital and MatlinPatterson - and Italian bank Mediobanca. Final offers are expected by the end of June.
The Italian government plans to sell most of its 49% of Alitalia in the hope of turning the airline around. It is requiring any new owner to retain the company's Italian character for several years after the purchase. (ireland.com, monstersandcritics.com)