Aeroflot pulls out of S7 merger
23 / 12 / 2008
AEROFLOT has withdrawn its proposed merger with S7, according to Aeroflot chief financial officer Mikhail Poluboyarinov. Poluboyarinov was reporting on the airline’s profit drop of 57 per cent for the first nine months of 2008.
The state-controlled airline made its interest in S7 public at the end of October, when Aeroflot sent a letter to the Transportation Ministry asking the government to transfer its 25.5 pe rcent stake in S7 to Aeroflot as a first step in a merger in the interest of “consolidating domestic flights.”
However, S7’s debt and asset transfers with subsidiary Globus Airlines are likely to have been the reason for Aeroflot’s cold feet. Short-term loans taken out by S7 worth 2.4 billion rubles (US$84.7 million) are due in December and January.