Russian tycoon sells 4% in Aeroflot for $110m

Russian tycoon Alexander Lebedev has sold a four percent stake in flag carrier Aeroflot for US$110 million, a financial market source told Reuters.

Under the deal, the National Reserve Bank (NRB), controlled by Lebedev, sold 44.2 million shares in the airline at $2.5 each – the minimum price NRB had signalled it would accept and below market levels, the source said.

With the order book two times oversubscribed, analysts said the deal offered proof of renewed confidence in the sector as Russia's consumers resume spending after a deep recession.

"This was a private placement, if they had done it at market rates they would not have been able to sell the whole amount. They offered a good discount of eight percent, and that explains the strong demand," said Georgy Tarakanov, analyst at VTB Capital.

"The strong demand is proof that investors are expecting share prices to rise -- it was a very good year for the sector."

The increased float after the sale will also be a positive for Aeroflot, he added.

The sale, organised by Swiss bank UBS, came just days after Aeroflot posted a 65 percent rise in nine-month net profit, as passenger numbers and revenue surged.

After cashing in on the strong rise in the share price, which has gained 54 percent since the start of the year, Lebedev is now left with 15.5 percent in Aeroflot.
(Source:www.cargonewsasia.com)