Russian govt to sell off Aeroflot stake

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Russia's government has reiterated its intention to sell a state stake in Aeroflot following its enlargement and reorganisation.

Vice premier and finance minister Alexei Kudrin said the 51% state-owned airline had been put on the extended list of strategically important enterprises scheduled for privatisation.

"Over the next three to five years, the state should cease to be a controlling shareholder in such companies. In the transportation sector, this will, first of all, concern Aeroflot," said Kudrin.

"The aim is to improve corporate governance, encourage private investment in developing key industries and raise up to $30 billion from selling state assets."

In line with the decision to lessen state control over Aeroflot, transport minister Igor Levitin has quit as its governing board chairman.

The value of a 51% government stake in the airline is currently estimated at Rb38 billion ($1.3 billion).

Industry analysts expect it to rise if the management successfully incorporates six provincial carriers, previously owned by the state, and achieves synergies from the enlarged Aeroflot's operation by 2014.