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ARMAVIA RESOLVES LATEST DISPUTE WITH ZVARTNOTS BUT SALE STILL ON
Business News Europe
Oct 17 2012
EU
Clare Nuttall in Astana
October 17, 2012
The Armenian airline Armavia has resumed services after striking a new
debt-restructuring deal with its main creditor Zvartnots International
Airport, but its majority shareholder, businessman Mikhail Baghdasarov,
looks as though he intends to press on with trying to offload the
unprofitable airline.
Plans to sell Armavia were announced by the airline management after
the latest spat with Zvartnots in late September. A spokesperson for
Armavia confirmed to bne on October 12 that negotiations on the sale
of the airline were underway, but declined to give any further details.
Zvartnots' management announced on September 20 that it was suspending
all Armavia flights until the airline had repaid $5.3m due in unpaid
service charges. Armavia had been due to repay its debts to Zvartnots
in full by September, under a previous deal struck between the two
companies back in March.
The Armavia spokesperson tells bne that flights had resumed after a
new deal was agreed. "We have reached agreement and the issue between
the airline and the airport has been resolved, so flights are operating
again," she said.
However, the suspension in services in September was just the latest
in a series of disputes between Armavia and Zvartnots, concerning
the level of service charges set by the airport. Flights have been
suspended several times in the last year - in November 2011, March
and most recently September.
Armavia argues that the service charges at Zvartnots, Armenia's
main international airport, are unreasonably high. Baghdasarov,
the airline's majority shareholder since 2005, has several times
said that Armavia might be forced to file for bankruptcy unless the
charges are reduced.
Previously, rumours have surfaced that Zvartnots' owner,
Argentinian-Armenian businessman Eduard Eurnekian, had deliberately
set high service charges for Armavia in an attempt to force the
airline into bankruptcy and take it over. When Armavia disclosed
that an Italian company was among the potential buyers for Armavia,
this gave rise to speculation that the would-be buyer could be Volare
Air Company, which is owned by Eurnekian.
However, PanARMENIAN.Net reported on October 4 that Eurnekian said
he had no intention of buying the airline. "I'm not planning to
buy Armavia," Eurnekian told journalists at an agriculture forum
in Yerevan.
Armavia has grown rapidly since it was launched in 2003, when it took
over the international license of the bankrupt Armenian Airlines.
However, it has increasingly come under pressure as global fuel prices
have increased. In April 2011, Armavia became the first commercial
airline to put a Russian-made Sukhoi Superjet 100 into operation,
but later cancelled its order for a second Superjet and tried to
return the first. However, on October 5, Sukhoi announced that it had
reached a new six-month leasing agreement with Armavia on the Superjet.
http://www.bne.eu/story4101/Armavia_resolves_latest_dispute_with_Zvartnots_but _sale_still_on
Business News Europe
Oct 17 2012
EU
Clare Nuttall in Astana
October 17, 2012
The Armenian airline Armavia has resumed services after striking a new
debt-restructuring deal with its main creditor Zvartnots International
Airport, but its majority shareholder, businessman Mikhail Baghdasarov,
looks as though he intends to press on with trying to offload the
unprofitable airline.
Plans to sell Armavia were announced by the airline management after
the latest spat with Zvartnots in late September. A spokesperson for
Armavia confirmed to bne on October 12 that negotiations on the sale
of the airline were underway, but declined to give any further details.
Zvartnots' management announced on September 20 that it was suspending
all Armavia flights until the airline had repaid $5.3m due in unpaid
service charges. Armavia had been due to repay its debts to Zvartnots
in full by September, under a previous deal struck between the two
companies back in March.
The Armavia spokesperson tells bne that flights had resumed after a
new deal was agreed. "We have reached agreement and the issue between
the airline and the airport has been resolved, so flights are operating
again," she said.
However, the suspension in services in September was just the latest
in a series of disputes between Armavia and Zvartnots, concerning
the level of service charges set by the airport. Flights have been
suspended several times in the last year - in November 2011, March
and most recently September.
Armavia argues that the service charges at Zvartnots, Armenia's
main international airport, are unreasonably high. Baghdasarov,
the airline's majority shareholder since 2005, has several times
said that Armavia might be forced to file for bankruptcy unless the
charges are reduced.
Previously, rumours have surfaced that Zvartnots' owner,
Argentinian-Armenian businessman Eduard Eurnekian, had deliberately
set high service charges for Armavia in an attempt to force the
airline into bankruptcy and take it over. When Armavia disclosed
that an Italian company was among the potential buyers for Armavia,
this gave rise to speculation that the would-be buyer could be Volare
Air Company, which is owned by Eurnekian.
However, PanARMENIAN.Net reported on October 4 that Eurnekian said
he had no intention of buying the airline. "I'm not planning to
buy Armavia," Eurnekian told journalists at an agriculture forum
in Yerevan.
Armavia has grown rapidly since it was launched in 2003, when it took
over the international license of the bankrupt Armenian Airlines.
However, it has increasingly come under pressure as global fuel prices
have increased. In April 2011, Armavia became the first commercial
airline to put a Russian-made Sukhoi Superjet 100 into operation,
but later cancelled its order for a second Superjet and tried to
return the first. However, on October 5, Sukhoi announced that it had
reached a new six-month leasing agreement with Armavia on the Superjet.
http://www.bne.eu/story4101/Armavia_resolves_latest_dispute_with_Zvartnots_but _sale_still_on