UTair (UT, Khanty-Mansiysk) CEO Andrey Martirosov says management is in the process of finalizing a RUB25 billion (USD378.3 million) bailout of UTair Aviation with a group of undisclosed investors.
Russia's Interfax news agency reports the funds will go towards debt restructuring with RUB11 billion (USD166.45 million) to be used to pay off outstanding aircraft leases, aviation fuel suppliers, and MRO and airport fees, while the remaining RUB14 billion (USD 211.85 million) will go to banks and bondholders.
Last month, UTair called for an extraordinary shareholders' meeting on March 3 in which it is proposing to compensate existing UTair-Finance's bondholders, set to have their existing bonds terminated, with new 12-year UTair-issued bonds with a nominal value of RUB1,000 roubles (USD15) per bond. Those who agree with the plan will have to suspend any legal action to recover the debt until the end of February.
Since late last year, creditors have stepped up their claims with Avialeasing, Alfa Bank, and lessor UGRA SPb among the largest claimants to have filed bankruptcy petitions against UTair.
With its overall debt estimated to be roughly RUB65 billion (USD983.58 million), UTair is also seeking a government bailout with Moscow reportedly pledging RUB13.5 billion (USD204.28 million). The remaining RUB41.5 billion (USD606 million) is UTair's responsibility.
The UTair Group - which includes Katekavia, UTair Helicopter Services, UTair-Cargo, UTair-Express, UTair-Ukraine, and Vostok Airlines - has come under increasing financial pressure precipitated by the overall slowdown of the Russian economy which is struggling to cope with tightening Western sanctions, low oil prices, and a plummeting Rouble.
