Russia Transaero may offer creditors to debt conversion, write off

MOSCOW, Oct 30 (PRIME) -- Troubled Russian airline Transaero has started to develop a business plan and may offer creditors a partial debt write off and share conversion, CEO Valery Zaitsev said in a letter to creditors seen by PRIME on Friday.

“Taking into account high volumes of debt and the difficulty of the situation in the company, this proposal will probably imply a partial write off of debts, as well as debt conversion into shares of the airline with a positive cash flow and a guaranteed yield,” he said.

“We are asking creditors to arm themselves with patience and assuring that you will receive a transparent and honest proposal on debt restructuring.”

The management’s priority task is to resume the company’s operating activity, he also said.

Transaero has failed to service 250 billion rubles of debt and plans to file for bankruptcy. Several creditors demand bankruptcy of the company as well. Its air operating certificate was recalled on Monday and the company has not asked for a new document.

Last week, Vladislav Filyov, a shareholder of S7 Group, said that he signed a deal to purchase at least 51% in the airline.

(64.1686 rubles – U.S. $1)

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