PRESS: Russia’s Utair asks banks to write off 31.4 bln rbl debts

MOSCOW, Mar 25 (PRIME) -- Russian troubled airline Utair has asked banks to write off 31.4 billion rubles of debt out of a total debt of 74.7 billion rubles, business daily Vedomosti reported on Monday quoting two employees of creditor banks and a source close to the airline.

Under the company’s debt restructuring plan, offered to commercial banks on March 21, a 23.7 billion ruble 12-year syndicated loan and a half of a 15.4 billion ruble 7-year syndicated loan should be written off fully, the business daily reported.

Of total debt, he company owes 17.4 billion rubles to Russia’s top bank Sberbank, and 4.9 billion rubles to companies of its former owner Surgutneftegas. Overdue bonds amount to 13.3 billion rubles. The airline does not offer any write offs on these debts. This means that the company wants to write off 40% of debt, or 80% of its syndicated debts, Vedomosti said.

Previously, the company defaulted on interest on the 7-year loan.

The write-off request is a result of six months of work on a restructuring plan together with Raiffeisenbank, and it comes as a result of development of a financial model and of income estimate for many years to come. The carrier explains the request by its incapability to service such a large debt, two bankers told the business daily. If the request is denied, the airline will go bankrupt.

Utair did not respond to a request for comment, while a source close to the airline told Vedomosti that the banks and the carrier did not discuss bankruptcy at the meeting.

(63.7705 rubles – U.S. $1)

End