S7 Airlines auction unlikely to proceed: Alfa Bank

This story is sourced from Pro
See more Pro news »

The auction of a state-owned controlling shareholding in S7 Airlines is likely to be cancelled due to a lack of investor interest.

Russia's federal competition bureau says it has received only one application submitted by the S7 Group and signed by its co-owner and director general Vladislav Filev.

In March, the government invited bids for its 25.5% stake in the Oneworld member carrier, with the initial price set at Rb1.12 billion ($36 million).

The auction is still scheduled to be held on 25 April, but Alfa Bank, which is acting as the government agent, says it could be called off due to the absence of competitive bidding.

Previous attempts by the government to sell its controlling interest in S7 Airlines saw the starting price drop to Rb2.89 billion in 2007, and to Rb1.87 billion in 2011.

Igor Krayevski, an analyst at BKS Capital, believes that portfolio investors would not be interested in buying shares in the tightly-controlled carrier without clarity about its prospects for a public listing.