Aeroflot shareholders back offering of 1.7bn new shares

Aeroflot (SU, Moscow Sheremetyevo) shareholders have approved at an extraordinary general meeting a state-approved increase in the company’s authorised capital by placing up to 1.7 billion additional shares via public subscription, the company said in a statement. The offering may also be opened up to private investors. The offering would more than double Aeroflot’s total shares, and this would rise to 60% of its enlarged capital if issued in full. The company has not yet set a price for the issue. It was also decided at the meeting to amend the articles of incorporation to increase the number of authorised shares from the current 250 million to 1.95 billion. This is expected to come into force after the changes to the corporate charter are registered with Russia’s Federal Tax Service. The measures are “aimed at improving the liquidity and financial stability of Aeroflot Group, as well as supporting the recovery of its operations to pre-crisis levels as the domestic and international air transportation markets revive,” Aeroflot said. The state plans to acquire part of the share issue, as it aims to maintain a stake that is no less than its existing 51.2% shareholding, sources told Reuters. This would be done through state-owned companies represented by the Russian Direct Investment Fund, which is a sovereign wealth fund, or through state-owned VTB Bank.