Utair shares will fly past the Khanty-Mansi Autonomous Okrug

Utair will convert 13.6 billion rubles. your debt in stock. As a result, the share of structures close to Surgutneftegaz in the airline’s capital will increase, while the stakes in the Khanty-Mansi Autonomous Okrug and the Tyumen Region will be almost doubled. According to Kommersant’s information, the participation of Surgutneftegaz in reducing the debt burden of Utair was a requirement of the main creditors – Bank Rossiya and Sberbank. In addition, Utair is restructuring part of its debt to Bank Rossiya in the amount of RUB 11.6 billion, receiving a grace period and interest holidays for the first few years. The repayment schedule will stretch for more than ten years and will be similar to the schedule for the Sberbank loan.

Utair will place an additional issue by private subscription in favor of its creditors AK-Invest JSC, Oil-Consulting LLC and UTair-Engineering JSC to convert debts to these companies into carrier shares. An extraordinary meeting of shareholders is scheduled for July 22.

The additional issue involves the placement of about 4.2 billion shares at a price of 3.25 rubles. apiece, which will ultimately increase the authorized capital of Utair by 13.6 billion rubles. Now the authorized capital of Utair is divided into 3.7 billion ordinary shares. The controlling stake – 50.1% – belongs to AK-Invest JSC. This company is owned by the inactive NPF “Pensionny Vybor” – this is the former NPF “Surgutneftegaz”. Now the ultimate owner of Pension Vybor is Valery Efimov. Nevertheless, the market still associates AK-Invest with Surgutneftegaz. Similarly, Surgutneftegaz is listed as a minority shareholder in Oil Consulting, and the Pension Assistance fund owns the main share in it (according to the fund’s website, it is engaged in non-state pension provision for Surgutneftegaz). UTair-Engineering is a 100% structure of UTair itself.

In addition to AK-Invest, the largest shareholders of the airline are KhMAO (38.8%) and the Tyumen region (8.4%).

According to a Kommersant source familiar with the situation, their shares will be diluted during the additional issue, while AK-Invest should retain control over Utair.

According to him, the additional issue is carried out at the request of the airline’s largest creditors – Rossiya Bank and Sberbank. In the case of UTair-Engineering, we are talking about an intra-group loan, it will be converted into equity.

In theory, the authorities of the Khanty-Mansi Autonomous Okrug and the Tyumen Region can vote against the additional issue, in which case, according to the law, Utair will have to redeem their stakes. However, in reality, such a scenario is not being discussed, the Kommersant source notes. “Both regions understand the strategic importance of the Utair group and want to retain ownership interests in it and participate in decision-making at the level of the supervisory board and shareholder meeting,” he adds. “In fact, their consent to the dilution means salvation from bankruptcy, while in a penniless form, because money will not be needed from the Khanty-Mansi Autonomous Okrug and the region,” the source notes. Kommersant sent a request to the administrations of both regions.

Now on the Moscow Exchange, Utair shares are traded at 7.12 rubles. per share, this is twice the price of the additional issue. However, Kommersant’s interlocutors and experts emphasize that this price cannot be considered representative, since liquidity is extremely low. “Only 0.8% of the shares are traded on the market, which is about 200 million rubles. The volume of trades per year is about 300 million rubles, which is no more than 1% of the capitalization, “says the source of Kommersant in the industry.

Airlines will remain unprofitable for now

The placement price is 3.25 rubles. per share is quite marketable, says Sergey Kuchin, head of the personal brokerage service department of BCS World of Investments. “For example, the trading volume of Utair shares for today is 600 thousand rubles. per day, and it will be difficult to sell even a part of the stake from the additional issue on the market. Therefore, in this situation, only creditor banks benefit, since the number of lenders is decreasing, ”he emphasizes. “I don’t see a market for resale here – the asset is illiquid, the price is not indicative, it could hardly interest a third-party investor outside the current creditors and shareholders of the company,” agrees Igor Smirnov, Senior Director for Corporate Ratings at Expert RA.

At the end of 2020, Utair’s loan commitments amounted to about 60 billion rubles. and consisted of two parts. The first part consists of two syndicated loans, where the Rossiya Bank bought out the shares of all the other members of the syndicate. According to Utair’s IFRS reporting, the debt on syndicated loans at the end of 2020 amounted to RUB 36.85 billion. Now, according to Kommersant’s sources, this amount is about 38 billion rubles. The second part is a loan from Sberbank for 21.3 billion rubles, which was restructured in December 2020. According to the reports, the loan maturity was extended until 2032, and a deferral was provided for the start of payments until 2023.

According to Kommersant’s information, Utair has already managed to obtain new restructuring terms for the debt that existed before Bank Rossiya before it consolidated debts to other syndicate members.

According to a Kommersant source, the body of this debt is 10.3 billion rubles, and the debt on interest exceeds 1.3 billion rubles. Under the new conditions, the interest-bearing debt is subject to capitalization in the body of the principal debt, and the loan amount will be 11.6 billion with a maturity of “more than ten years.” “At the same time, a grace period and interest vacations for the first few years will be applied, the repayment schedule will be similar to the repayment schedule for a bilateral loan at Sberbank,” the source said. “No decision has yet been made regarding the revision of the terms on the airline’s debts acquired by Rossiya Bank from other syndicate creditors,” the source said.

It is assumed that the decrease in Utair’s debt burden as a result of the additional issue will pave the way for the completion of negotiations on the restructuring of the remaining debt.

Aigul Abdullina